Wall Street experienced a relative period of calm following its worst day since April, buoyed by President Trump’s softened stance on acquiring Greenland. The market rebound saw over 350 shares in the S&P 500 increase at midday, recovering from what some analysts dubbed a resurgence of the “Sell America” trade triggered by geopolitical uncertainty. Small-cap stocks outperformed the US equity benchmark for the 13th consecutive day, while the performance of major technology stocks was mixed. Renewed volatility in the cryptocurrency market tempered overall market sentiment, leading to a slight reduction in earlier gains.
According to Brian Jacobsen of Annex Wealth Management, the market reaction was less about what President Trump said, and more about what he didn’t say. Trump notably refrained from reiterating tariff threats against Europe, threatening the use of force to acquire Greenland, or imposing credit card rate caps, instead requesting Congressional action. Jacobsen noted that the shift suggested a de-escalation of substantive issues, even if the President’s communication style remained unchanged.
Speaking at the World Economic Forum in Davos, Trump indicated a desire for immediate negotiations regarding the acquisition of Greenland for national security purposes. While ruling out military intervention, he suggested that Europe’s response to his demands would factor into future US commitments to the North Atlantic Treaty Organisation. Fiona Cincotta of City Index observed that Trump’s tone was somewhat more conciliatory, noting that the possibility of a diplomatic resolution remained, alongside the continued threat of trade tariffs.
The prospect of a trade agreement between the United States and the European Union remains uncertain after the European Parliament’s decision to suspend a ratification vote in response to President Trump’s escalating threats regarding Greenland. The EU is a political and economic alliance of 27 member states that are located primarily in Europe. The USA, officially the United States of America, is a country primarily located in North America consisting of 50 states.
