Dow surges 550 points, S&P 500, Nasdaq jump as Trump backs off Greenland tariff threats

US stocks rallied on Wednesday after President Trump announced the ‘framework of a future deal‘ with respect to Greenland and called off tariffs threatened against numerous European countries.

The Dow Jones Industrial Average (^DJI) rose around 1.2%. The tech-heavy Nasdaq Composite (^IXIC) rose 1.2%, while the S&P 500 (^GSPC) gained about 1.1%, its best day since November.

The markets had been in positive territory earlier in the session but took a leg higher after Trump announced the Greenland development in afternoon trading. The move higher was a reversal of Tuesday’s biggest daily decline since October as investors feared renewed tariffs would spark a trade war between the EU and US.

Energy (XLE), Materials (XLB), and Tech (XLK) led the stock market higher on Wednesday after President Trump called off fresh threats of tariffs against Europe as he announced a ‘framework of a future deal’ related to Greenland.

Megacaps Nvidia (NVDA), Tesla (TSLA), Apple (AAPL), and Alphabet (GOOG, GOOGL) all gained.

The stock market rebounded sharply after the worst day since October as investors feared a fresh wave of tariffs against the EU would spark a trade war between the two

US stocks moved to session highs on Wednesday afternoon after President Trump anounced a called off tariffs against European countries related to his pursuit of Greenland.

“Based upon a very productive meeting that I have had with the Secretary General of NATO, Mark Rutte, we have formed the framework of a future deal with respect to Greenland and, in fact, the entire Arctic Region,” wrote Trump in a Truth Social post on Wednesday afternoon.

“This solution, if consummated, will be a great one for the United States of America, and all NATO Nations. Based upon this understanding, I will not be imposing the Tariffs that were scheduled to go into effect on February 1st,” he added.

The Dow Jones Industrial Average (^DJI) soared more than 700 points or roughly 1.6%, while the S&P 500 (^GSPC) increased more than 1.5%. The tech-heavy Nasdaq Composite (^IXIC) also moved to a session high.

Bitcoin (BTC-USD) briefly touched $90,000 on Wednesday before falling to roughly $88,000 as President Trump offered encouragement on legislation in Congress that could catalyze crypto prices.

The token rallied 1% after Trump said he was working “to ensure America remains the crypto capital of the world.”

“Congress is working very hard on crypto market structure legislation…which I hope to sign very soon,” said Trump at the World Economic Forum in Davos.

The president’s comments raised hopes for a broader regulatory framework after the bill hit a snag last week when trading platform Coinbase (COIN) withdrew its support ahead of a key markup session.

The Trump administration argued before the Supreme Court on Wednesday that the president’s move to fire Federal Reserve Governor Lisa Cook amid mortgage-fraud allegations should be allowed to stand.

The Court appeared skeptical, Bloomberg News reported.

Among skeptics on the bench were Trump appointees Brett Kavanaugh and Amy Coney Barrett.

Trump’s move to fire Cook back in the summer is just one part of his efforts to reshape the central bank, which now include a DoJ probe into Fed Chair Jay Powell’s testimony about renovations at the Fed’s headquarters.

Trump has not yet announced who he will nominate to replace Powell, whose term is up in May.

Betting markets see former Fed governor Kevin Warsh as the most likely to receive the nod from the president.

BlackRock (BLK) US Head of Equity ETFs Jay Jacobs dismissed fears of an AI bubble during an interview with Yahoo Finance, pointing to the asset manager’s latest report published Wednesday on the topic.

In the event of a market bubble, Jacobs said, “the fear would be either it’s [AI is] not growing fast enough or companies are spending too much money and taking too much risk on this segment.”

“But I think both of those are not very well founded.”

He pointed to the BlackRock analysis showing AI token consumption — a broadly accepted measure of usage — growing 17-fold between December 2024 and January 2026, while noting that AI spending accounts for a smaller share of US GDP than buildouts for other technological revolutions.

Perhaps most telling: Jacobs said his team’s analysis shows earnings grew at a faster pace for the 46 AI companies in the S&P 500 in 2025 than their stock prices.

The graph above shows that earnings grew more than 30% on average for AI companies in the S&P 500, while their stock prices rose just 26%. At the same time, their valuations fell more than 5%.

For non-AI companies, share price growth outpaced earnings growth.

“If you were really worried about a bubble, what you would be implying is that valuations are getting ahead of kind of real profitability in those companies,” Jacobs said. “What we saw last year was that for AI companies, actually their valuations decreased.”

“This is not just speculative valuation expansion, but there’s real businesses that are growing here.”

Defense stocks moved higher on Wednesday after President Trump touted the US’s military power in a speech at the World Economic Forum summit in Davos.

“We make the greatest weapons in the world. But now we’re going to make them faster, much faster,” Trump said.

Trump’s remarks came ahead of a House vote on a $839 billion spending bill this week. Part of that includes President Trump’s Golden Dome missile defense project, which is slated to receive $13.4 billion in funding, and Lockheed Martin’s F-35 Joint Strike Fighter program, which could receive $7.6 billion for 47 aircraft.

US defense stocks, such as GE Aerospace (GE), Lockheed Martin (LMT), L3Harris Technologies (LHX), and Northrop Grumman (NOC), rose by more than 1% in late morning trading.

Earlier this month, President Trump signed an executive order prohibiting defense contractors from buying back stock or issuing dividends “until such time as they are able to produce a superior product, on time and on budget.”

“The good news is we have the greatest equipment in the world,” Trump added in his speech. “Now we’re going to start making it a lot faster. They’re going to build additional plants. And all of the money that goes into stock buybacks is going to go into building plants.”

Yahoo Finance’s Claire Boston reports:

Read the full story here.

Yahoo Finance’s David Hollerith reports:

Read more here.

Intel (INTC) shares rose 10.5% Wednesday to reach their highest level since 2022 as Wall Street analysts’ optimism over the chipmaker’s recent resurgence grew ahead of its quarterly earnings report Thursday.

Bernstein analyst Stacy Rasgon raised his price target on shares slightly to $36 from $35 Wednesday, noting “positive market dynamics” in the data center server space but noting that its manufacturing business as “quite a ways to go.”

Rasgon’s bumped-up outlook comes a day after Intel stock got two upgrades from HSBC analyst Frank Lee and Seaport’s Jay Goldberg.

Lee changed his rating to Hold from Reduce, citing greater demand for CPUs — central processing units, or more traditional computing chips made by Intel that are used alongside AI chips — from data centers due to agentic AI. Meanwhile, Goldberg upgraded shares to Buy from Neutral, pointing to “strong signals” for Intel’s PC chips and an “improving outlook” for its manufacturing business.

Yahoo Finance’s Dan Howley reports:

Read more about Huang’s commentary in Davos at the link.

Speaking at the World Economic Forum’s Davos summit on Wednesday, President Trump doubled down on his push to bring down credit card interest rates.

“I’m asking Congress to cap credit card interest rates at 10% for one year, and this will help millions of Americans save for a home,” Trump said in his speech.

American credit card issuers currently charge interest rates of “28%, 30%, 31%, 32%,” Trump said, forcing citizens to “[lose] their house” after getting a “little late on their payment.”

Trump claimed that the profit margin for credit card companies “now exceeds 50%.”

Speaking at the Davos summit earlier in the week, JPMorgan Chase CEO (JPM) Jamie Dimon said a 10% interest rate cap would cause “economic disaster” in the US and force banks to cancel credit lines for a large swath of Americans.

The credit card interest rate cap is part of a larger push by Trump for housing affordability. During his comments at Davos, Trump called out his executive order banning “large institutional investors” from buying single-family homes.

“America will not become a nation of renters, we’re not going to do that,” Trump said. “It’s just not fair to the public.”

US stocks rose at the market open on Wednesday as President Trump eased his tone on Greenland in a speech at the World Economic Forum in Davos.

The Dow Jones Industrial Average (^DJI) climbed 0.4%, while the tech-heavy Nasdaq Composite(^IXIC) rose 0.3%. The S&P 500 (^GSPC) also added 0.4%, coming off a bruising Tuesday session that saw investors rush for the exits against a backdrop of boiling geopolitical tensions.

Trump’s administration is seeking to take over the strategically located, mineral-rich Arctic territory of Denmark, risking its alliance with European nations and putting markets on edge.

Kraft Heinz (KHC) stock fell 5% before the bell on Wednesday after news was released that Berkshire Hathaway’s new CEO, Greg Abel, may be considering selling its 325 million shares in the food giant.

United Airlines (UAL) stock rose 3% before the bell on Wednesday after reporting fourth quarter earnings that beat estimates.

Ardagh Metal Packaging stock rose 7% during premarket hours today. Analysts at BMO Capital upgraded the stock to Outperform.