Wall Street Recovers After Trump Softens Greenland Stance/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. stock markets steadied Wednesday after President Trump said he would not use military force to acquire Greenland. The S&P 500 gained 0.3% following Tuesday’s steep drop, as investors welcomed a de-escalation in rhetoric. Gold prices surged and bond yields eased amid lingering uncertainty.
Wall Street Reacts to Trump: Quick Looks
- Markets Rebound: S&P 500 rose 0.3% after Trump softened Greenland rhetoric.
- Dow Climbs: Dow Jones Industrial Average gained 188 points, or 0.4%.
- Gold Surges: Gold prices hit $4,800/oz for the first time.
- Bond Market Settles: 10-year Treasury yield dipped to 4.27% from 4.30%.
- Global Influence: Japan’s markets wobbled amid snap election and soaring debt.
- Corporate Movers: Halliburton and United Airlines rose on strong earnings; Netflix fell.
- Tariff Fears Remain: Trump threatened new tariffs on EU nations opposing Greenland sale.
- Market Psychology: “TACO” (Trump Always Chickens Out) referenced by investors.
- Berkshire Shift: Kraft Heinz sank 6% after Buffett’s firm eyed divestment.
Deep Look: Wall Street Finds Stability After Trump Eases Threat Over Greenland
NEW YORK — January 21, 2026
Wall Street found some footing on Wednesday, rebounding from its worst trading day in months after President Donald Trump clarified he would not use military force to take control of Greenland. The assurance came during a high-stakes address in Davos, Switzerland, helping markets ease from Tuesday’s panic-driven selloff.
The S&P 500 rose 0.3%, trimming the 2.1% loss it suffered the day before, while the Dow Jones Industrial Average gained 188 points (0.4%). The Nasdaq composite remained flat.
Trump told global business and political leaders that while he still seeks “immediate negotiations” to acquire Greenland from Denmark, the U.S. would not resort to force. “What I’m asking for is a piece of ice,” Trump said, adding, “I don’t want to use force. I won’t use force.”
Markets appeared to breathe a collective sigh of relief after his comments suggested a pause in escalating tensions with NATO allies. Wall Street had been spooked by Trump’s aggressive stance, including tariff threats on eight European countries.
Stocks Climb Despite Lingering Jitters
The positive tone helped major indexes recover ground, though analysts warned of continued volatility. While the president backed off military action, his push for new tariffs — set to begin at 10% in February and potentially rise to 25% by June — remains in play.
Even as equities ticked upward, gold prices jumped another 1%, breaking above $4,800 per ounce for the first time. This signaled ongoing investor concern about geopolitical stability and economic policy uncertainty.
Trump, in his remarks, acknowledged Tuesday’s market drop, calling it “peanuts compared to what it’s gone up” since his second term began. He also pledged that markets would rally further, reinforcing confidence in his economic vision despite criticisms.
Familiar Pattern: Threat, Drop, Retreat, Deal
Trump’s negotiating style has long rattled markets. His habit of issuing bold threats that spark market turmoil — only to retreat and strike less dramatic deals — has earned the nickname “TACO” among some investors: “Trump Always Chickens Out.”
Still, the same pattern has produced unexpected wins for Trump, including controversial trade pacts that critics once dismissed as unrealistic. His initial threat of sweeping tariffs in 2024 led to renegotiated agreements with several global economies.
Winners and Losers in the Market
Some corporate earnings reports helped boost investor sentiment. Halliburton rose 5% after beating analysts’ profit expectations for the fourth quarter. United Airlines gained 2.1%, citing ongoing revenue momentum heading into 2026.
However, not all earnings were well-received. Netflix fell 4.6% despite beating profit projections, as investors focused on slowing subscriber growth and a weak forecast for the first quarter of 2026.
Meanwhile, Kraft Heinz plunged 6% after Berkshire Hathaway revealed it may sell its 325 million shares in the food giant. The move follows months of tension over Kraft Heinz’s restructuring plan and significant writedowns. Berkshire’s two board members resigned in 2025, signaling frustration from Warren Buffett’s firm.
Global Markets Mixed Amid Political Unrest
Markets outside the U.S. showed mixed performance. Japan’s Nikkei 225 slipped 0.4% as the country prepared for a snap election on February 8, called by Prime Minister Sanae Takaichi. Her expected tax cuts and spending plans have pushed bond yields higher, raising concerns about national debt.
Japanese long-term government bonds surged Tuesday, with the 40-year yield hitting a record 4.22%, before pulling back to 4.05% Wednesday.
Meanwhile, European markets were largely unchanged, with traders watching closely for developments in U.S.-EU relations. European Commission President Ursula von der Leyen has warned that any U.S. tariffs tied to the Greenland dispute could unravel the fragile trade pact reached in 2025.
Bonds and Currency Movements
The U.S. 10-year Treasury yield eased to 4.27%, down from 4.30% Tuesday, as bond markets stabilized alongside stocks. The U.S. dollar also steadied after falling the day before, holding ground against the euro, Swiss franc, and yen.
Investors remain cautious, balancing hopes that Trump’s softened rhetoric signals an easing of geopolitical risks with the fear that volatility could return at any moment.
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