Dow surges 700 points after Trump announces Greenland framework, calls off tariff threat

• Trump ruled out military action for Greenland and called off European tariff threats, describing a potential deal as 'great for the United States' and its North Atlantic allies
• Treasury yields eased and the dollar strengthened after previous declines, following a pattern where Trump's initial threats are followed by less disruptive deals
• Strong corporate earnings from Halliburton (up 2.9%) and United Airlines (up 2.7%) supported the rally, while Netflix fell 2.9% despite beating profit expectations due to slowing growth concerns

Market Summary: Dow Surges on Trump's Greenland Deal, Tariff Reversal

Key Market Movements:

The U.S. stock market rallied sharply on Wednesday, with the Dow Jones Industrial Average climbing 1.2% (nearly 600 points) to 49,072 in late-day trading. The S&P 500 gained 1.1%, while the Nasdaq advanced over 250 points (+1.2%). The rally helped the S&P 500 recover most of its 2.1% drop from the previous session.

Catalyst:

President Trump announced a framework agreement regarding Greenland and canceled threatened tariffs on several European countries. Speaking at Davos, Switzerland, Trump ruled out military action on the Danish territory, easing geopolitical tensions that had weighed on markets.

Market Implications:

The de-escalation sparked a broad risk-on sentiment. Treasury yields eased following Tuesday's spike, which had signaled inflation concerns. The U.S. dollar recovered some losses against other currencies. The pattern reflects what some analysts call "TACO" (Trump Always Chickens Out), where initial threats are followed by market-friendly deals, similar to the "Liberation Day" tariff situation that led to trade agreements.

Company-Specific Performance:

• Halliburton: +2.9% after beating profit expectations
• United Airlines: +2.7% on stronger-than-expected Q4 2025 earnings; CEO noted continued revenue momentum into 2026
• Netflix: -2.9% despite earnings beat, as investors focused on slowing growth
• Kraft Heinz: -6.3% after Berkshire Hathaway disclosed potential sale of its 325 million shares

Broader Context:

Bond yields in Japan also calmed following concerns about government debt levels, providing additional support to global markets.