Dow, S&P 500, Nasdaq Higher; Trump at Davos; Intel, Netflix, Nvidia, Micron, More Movers
Wall Street breathed a sigh of relief as stocks and bonds rose after President Donald Trump walked back his tariffs on Europe. The threat of a transatlantic trade war faded just as quickly as it started.
The S&P 500 rose 1.2%, after falling more than 2% yesterday. The Dow was up 591 points, or 1.2%, while Nasdaq was up 1.2% on Wednesday. The last time all three indexes rose by more than 1% on the same day was Oct. 20.
Trump said he and NATO Secretary General Mark Rutte “have formed the framework of a future deal with respect to Greenland and, in fact, the entire Arctic Region.” He did not commit to the specifics of the deal, but in a separate interview with CNBC suggested that it would last “forever” and include mineral rights.
Earlier this morning, Trump had said he wanted immediate negotiations on Greenland, a place of strategic importance to the U.S. for security purposes. That came after Trump’s Saturday Truth Social post, where he threatened to impose a 10% tariff on goods sent to the U.S. from Denmark, Norway, Sweden, France, Germany, U.K., Netherlands, and Finland starting Feb.1
The penchant for the stocks to fall and rise on tariff news shows how key trade has become to the market’s future growth story. Trump walking back his decisions after a backlash from the market also creates an impression that there’s a “floor” under asset prices.
That’s a dilemma as it pushes more investors into markets even when valuations look stretched since they assume there’ll always be a helping hand from the administration.
Taking an average for the performance of the four major assets–stocks, Treasuries, Bitcoin, corporate bonds–the gain comes out to be 0.8%. The four fell an average on 2.6% yesterday, which means the market is yet to recoup all the losses.
Yesterday marked the first full year that Trump has been in office. “The 13% gain for the S&P 500 over the past year was solid, but it didn’t stack up to the 24% gain after Trump’s first year in office in 2017,” wrote Bespoke Research. “In fact, it was actually the smallest rally for the first year of an administration since the second Bush administration.”
