US equities moved significantly higher on Thursday, marking a strong recovery that clawed back more of the steep losses incurred earlier in the week. This positive shift in market sentiment was primarily driven by President Donald Trump stepping back from tariff threats linked to Greenland, which helped ease growing concerns over a widening transatlantic trade rift.
Major Indices Show Strong Gains
In early trading sessions, the benchmark S&P 500 index rose by 0.7%, building on Wednesday's substantial rebound. The Dow Jones Industrial Average demonstrated particularly robust performance, gaining 468 points, while the technology-heavy Nasdaq Composite advanced by 0.8%. US stock futures had earlier signaled a positive opening, extending the relief rally that was initially sparked by Trump's notably softer tone at the World Economic Forum in Davos.
Trump's Policy Shift Calms Markets
Financial markets reacted positively after President Trump announced he had reached a "framework" for a deal concerning Greenland and explicitly ruled out the use of force. This represented a significant reversal from his earlier threat to impose 10% tariffs on eight European countries: Denmark, Norway, Sweden, Germany, France, the United Kingdom, the Netherlands, and Finland. The de-escalation of trade tensions provided much-needed stability to investor confidence.
Despite this encouraging rebound, all three major US indices remain lower for the week overall. This follows their steepest losses since October recorded on Tuesday, when the initial tariff threat first rattled investors and triggered substantial market volatility.
Corporate Performance Mixed
On the corporate front, Generac shares rose approximately 3% amid forecasts predicting a severe ice storm hitting large parts of the United States. In contrast, Procter & Gamble slipped 1.2% after narrowly beating profit estimates but missing revenue expectations and trimming part of its full-year outlook. McCormick & Co experienced more significant declines, tumbling 6.8% after missing profit targets and issuing weak guidance attributed to elevated commodity costs.
Investors Await Economic Data
Market participants were also awaiting fresh US macroeconomic data releases, including weekly jobless claims, an updated estimate of third-quarter GDP, and delayed inflation readings for November and December. These indicators were expected to provide further direction for market movements in the coming sessions.
Global Markets Show Broad Support
Global markets exhibited broadly supportive trends alongside the US rally. In Europe, Germany's DAX and France's CAC 40 both rose by 1.2% each, while Britain's FTSE 100 added a more modest 0.4%. Asian equities closed higher, led by Japan's Nikkei 225, which jumped 1.7% with technology stocks driving substantial gains. South Korea's Kospi rose 0.9%, while Hong Kong and Shanghai markets edged higher with more conservative increases.
Commodities and Bonds Reflect Changing Sentiment
As risk appetite improved across financial markets, gold prices eased slightly, slipping 0.2% to $4,829.80 per ounce after earlier touching record highs. In the bond market, the US 10-year Treasury yield fell to 4.25%, reflecting easing risk aversion among investors. Crude oil prices declined during the session, with US benchmark crude trading at $59.73 per barrel and Brent crude at $64.32 per barrel.
