Wall Street Rises as Trump Pulls Tariff Threat/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. stocks surged Thursday after President Trump backed off a controversial plan to impose tariffs on European nations over Greenland. The S&P 500 gained 0.7%, and the Dow rose over 450 points as investor fears eased. Economic data and strong corporate earnings added to the market momentum.
Markets & Tariffs Quick Looks
- S&P 500 rose 0.7%, extending Wednesday’s rally.
- Dow Jones up 456 points; Nasdaq gained 0.9%.
- Trump cancels 10% tariffs on European countries over Greenland dispute.
- “TACO” acronym resurfaces: “Trump Always Chickens Out.”
- U.S. dollar stabilized; gold prices slightly declined.
- Jobless claims fell, signaling a stable labor market.
- Revised GDP data shows faster-than-expected Q3 growth.
- Northern Trust soared 6.3% after strong earnings.
- Generac rose 3.4% amid looming U.S. ice storm.
- McCormick dropped 4.7% on weaker-than-expected profit.
- Japan and European indexes rallied alongside U.S. markets.
Deep Look: U.S. Markets Rally as Trump Reverses Greenland Tariff Plan
NEW YORK — Wall Street bounced back Thursday morning, regaining nearly all its earlier losses from the week, after President Donald Trump abruptly dropped plans to impose tariffs on several European nations over their opposition to his ambitions in Greenland.
The S&P 500 climbed 0.7%, building on Wednesday’s gains. The Dow Jones Industrial Average surged 456 points (0.9%), and the Nasdaq Composite rose 0.9%, fueled by easing geopolitical tension, upbeat earnings, and promising economic signals.
This market rebound marks the latest instance in a now-familiar pattern: Trump makes an aggressive move, markets react sharply, and he retreats amid financial backlash. The behavior has led traders and analysts to coin the acronym “TACO”—Trump Always Chickens Out—when market pressure becomes too great.
From Threat to Walkback
Earlier this week, Trump shocked global markets by threatening to impose 10% tariffs on European countries that publicly opposed his plan to acquire Greenland, a Danish territory. The proposal—dismissed as unorthodox—shook investor confidence and triggered the worst market drop since October.
But after what Trump called “the framework of a future deal with NATO leadership,” the tariffs were canceled, with no clear documentation or details released.
While the agreement remains informal, the policy reversal reassured investors. Market indicators including bond yields, currency exchange rates, and safe-haven asset prices began to normalize.
Dollar, Gold, and Treasurys Hold Steady
The U.S. dollar stabilized against major currencies like the euro after dipping earlier in the week. Gold prices, which surged as a safe-haven play during the tariff scare, edged lower, reflecting reduced anxiety.
Meanwhile, Treasury yields remained steady, with the 10-year yield holding at 4.26%. Investors took comfort in two key economic reports:
- Jobless claims fell below economist expectations, suggesting low layoff activity and a resilient labor market.
- Revised data showed that the U.S. economy grew faster in Q3 2025 than previously estimated, a welcome signal amid inflation and global uncertainty.
Corporate Earnings Boost Sentiment
Several companies posted strong quarterly results, further fueling Thursday’s rally:
- Northern Trust jumped 6.3% after beating Wall Street earnings estimates. CEO Michael O’Grady said the firm was entering 2026 with “strong momentum across all our businesses.”
- Procter & Gamble rose 2% after exceeding profit expectations, though revenue slightly missed forecasts due to a “challenging consumer and geopolitical environment,” according to CEO Shailesh Jejurikar.
- Generac, the power generator manufacturer, gained 3.4% as demand surged ahead of an anticipated severe winter storm sweeping the U.S.
On the downside, McCormick & Co. dropped 4.7% after reporting a weaker profit, impacted by higher commodity costs.
Global Markets React Positively
Markets across Europe and Asia rallied on Trump’s reversal, with relief spreading beyond Wall Street:
- Japan’s Nikkei 225 surged 1.7%,
- France’s CAC 40 rose 1.2%,
- Other major indexes showed similar upward movement.
Japan’s bond markets also steadied after a volatile start to the week. The 40-year Japanese government bond yield, which spiked to 4.22% on concerns over potential debt expansion, fell back below 4% on Thursday.
Market Outlook
Despite the drama surrounding Trump’s Greenland tariff saga, markets are showing resilience driven by economic fundamentals and corporate strength. Still, uncertainty around U.S. trade and foreign policy continues to make investors wary.
While Thursday’s rally suggests confidence in a more stable near-term outlook, analysts caution that continued political unpredictability could bring further market swings in 2026.
You must Register or Login to post a comment.