European markets set to rocket on Trump's Greenland 'deal,' tariffs retreat

• Major European indices expected to surge at open: UK up 0.8%, Germany up 1.3%, France up 1.2%, and Italy up 1.5%
• Trump's Greenland 'framework' involves proposed collaboration on a Golden Dome missile defense system and resource access, though he admitted specifics are 'a little bit complex'
• Uncertainty remains over the EU-U.S. trade deal's future after European lawmakers voted on the agreement reached last year

Summary

Market Movement:

European markets are poised for a strong opening Thursday, with the UK's FTSE expected to rise 0.8%, Germany's DAX up 1.3%, France's CAC up 1.2%, and Italy's FTSE MIB gaining 1.5%, according to IG data.

Key Catalyst:

The rally follows President Donald Trump's announcement of a "framework" agreement concerning Greenland, made during his address at the World Economic Forum in Davos on January 21, 2026. Most significantly, Trump called off planned escalating tariffs on European countries that had threatened transatlantic trade relations.

Agreement Details:

Trump stated the framework was developed with NATO Secretary General Mark Rutte. He described it as more of a "concept" involving U.S.-European collaboration on a proposed "Golden Dome" missile defense system and access to Greenland's resources. When pressed for specifics, Trump acknowledged the plan is "a little bit complex" and promised further details later.

Remaining Uncertainties:

Significant questions persist regarding the future of the EU-U.S. trade deal, particularly after European lawmakers took action concerning the agreement reached last year. The article notes this remains unclear.

Upcoming Events:

CNBC will conduct interviews with multiple CEOs and political leaders at Davos on Thursday, including executives from Merck and Vestas, along with political figures such as Latvia's President Edgars Rinkēvičs, Spain's Economy Minister Carlos Cuerpo, and Irish Taoiseach Michael Martin.

Data Calendar:

No major earnings reports or economic data releases are scheduled for Thursday.

Market Implications:

The tariff retreat provides immediate relief for European equities, removing a significant trade war threat and uncertainty that had been weighing on investor sentiment.