Global stocks rebound after Trump announces Greenland framework, eases tariff concerns

Global markets staged a strong recovery on Wednesday (Jan 21) after U.S. President Donald Trump said a framework had been reached for a future deal involving Greenland, easing investor anxiety following a sharp selloff a day earlier.

Speaking at the World Economic Forum in Davos, Trump also said the United States would not proceed with tariffs that were due to take effect on Feb. 1. He had earlier ruled out using force to take Greenland, which helped calm market sentiment.

Wall Street posts biggest gains in weeks

U.S. stocks closed firmly higher, with the S&P 500 recording its strongest one-day percentage gain in two months.

  • Dow Jones Industrial Average: up 1.21%
  • S&P 500: up 1.16%
  • Nasdaq Composite: up 1.18%

The S&P 500 logged its biggest daily gain since Nov. 24, while the Dow and Nasdaq posted their strongest percentage rises since early January and mid-December, respectively.

Analysts noted that the rally was driven less by clarity on the long-term outcome of Greenland negotiations and more by the reduction of near-term uncertainty, particularly around tariffs.

Global markets mixed, volatility drops

MSCI’s All-World Index rose 0.87%, recovering from the previous session’s losses. In Europe, the STOXX 600 ended slightly lower by 0.02%, while Britain’s FTSE 100 gained 0.11%.

Investor fear eased sharply, with the VIX volatility index falling more than 15% to 17, after spiking to its highest level since November the day before.

Political tensions remain in focus

Despite the market rebound, uncertainty around U.S.-European relations continued. A European Parliament member said the body had suspended work on a potential EU-U.S. trade deal following Trump’s repeated remarks about taking control of Greenland. The European Union is also set to hold an emergency summit in Brussels on Thursday.

Bonds stabilize after heavy selloff

Bond markets showed signs of stabilizing after steep losses earlier in the week, driven by concerns over exposure to U.S. assets and rising Japanese government borrowing costs.

Japanese long-dated government bonds, which saw their sharpest selloff in nearly 25 years on Tuesday, rebounded as buyers returned. U.S. Treasury yields also eased:

  • 30-year Treasury yield fell 5.1 basis points to 4.8693%
  • 10-year Treasury yield fell 4.4 basis points to 4.251%

Dollar rebounds; oil and gold rise

In currency markets, the U.S. dollar index rose 0.25%, while the euro slipped 0.34% to 1.1686. The yen weakened slightly to 158.37 per dollar ahead of the Bank of Japan’s policy meeting on Friday.

Oil prices edged up, supported by supply concerns linked to temporary shutdowns at two major fields in Kazakhstan, though expectations of rising U.S. crude inventories limited gains.

  • Brent crude settled up 0.49% at US$65.24 a barrel

Gold strengthened as well, with spot gold up 1.11% at US$4,815.93 per ounce.Source: Reuters
— Agencies