Stocks rise as dollar dips after Trump's walk-back of Greenland threats
A specialist trader works at his post on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., January 21, 2026. REUTERS/Brendan McDermid
NEW YORK/ LONDON, Jan 22 : MSCI's global equities gauge was higher on Thursday and the dollar dipped as investors showed signs of relief a day after U.S. President Donald Trump dropped tariff threats against eight European countries and ruled out seizing Greenland by force.
Trump said on Thursday that the details of a U.S. agreement over Greenland are still being worked out after he stepped back from threats to seize the Danish territory.
In an interview on Fox Business Network from the World Economic Forum in Davos, Trump said any deal would allow the U.S. "total access" to Greenland, including for the military, "at no cost."
Data from the Commerce Department's Bureau of Economic Analysis showed the U.S. economy grew a bit faster than initially thought in the third quarter and corporate profits were also revised higher.
The upwardly revised 4.4 per cent annualized growth rate in U.S. GDP was the fastest pace since the third quarter of 2023, while U.S. consumer spending increased solidly in November and October.
The number of Americans filing new applications for unemployment benefits increased marginally last week, suggesting the labor market likely maintained a steady pace of job growth in January.
But after the sharp sell-off in U.S. stocks earlier in the week on Greenland concerns, investors were taking U.S. economic data in their stride on Thursday as they digested Trump's turnaround from earlier threats, said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.
"Overwhelming all other news is the Greenland story, and the suggestions that are now withdrawn of military action or tariffs," Meckler said. "The market tends to react to emergencies, and it seems the emergency aspect of this is over for now."
Meckler noted, however, that Thursday's trading was "more a relief rally ... than an understanding whether there's a material change in the world economic order and how the U.S. is going to interact with its traditional trading partners."
On Wall Street at 2:40 p.m. (1940 GMT), the Dow Jones Industrial Average rose 410.15 points, or 0.83 per cent, to 49,484.06, the S&P 500 rose 49.23 points, or 0.72 per cent, to 6,924.85 and the Nasdaq Composite rose 246.26 points, or 1.06 per cent, to 23,469.79.
MSCI's gauge of stocks across the globe rose 8.76 points, or 0.85 per cent, to 1,037.41.
Earlier, the pan-European STOXX 600 index closed up 1.03 per cent.
In currencies, the safe-haven U.S. dollar was lower after Trump's turnaround on Greenland, and was little changed by U.S. economic data.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.53 per cent to 98.36.
The euro was up 0.53 per cent at $1.1744 while against the Japanese yen, the dollar strengthened 0.11 per cent to 158.43. Sterling strengthened 0.47 per cent to $1.3488.
In U.S. Treasuries, benchmark yields rose but remained confined to a narrow range, as investors prepared for bouts of volatility and awaited clarity on the Greenland framework deal being negotiated between the U.S. and European leaders.
"A little bit of the policy shock has been taken off the table, but only for the moment. And it is a relief, but at the same time, it increased the market's wariness around the potential for this to happen again," said Tony Rodriguez, head of fixed income strategy at Nuveen.
The yield on benchmark U.S. 10-year notes fell 0.4 basis points to 4.249 per cent, from 4.253 per cent late on Wednesday while the 30-year bond yield fell 2.2 basis points to 4.8478 per cent.
The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 1.3 basis points to 3.61 per cent, from 3.597 per cent.
In energy markets, oil prices fell more than $1, reversing the previous sessions' gains, after Trump softened threats against Greenland and Iran, and on hopes for progress on a solution to end Russia's war in Ukraine.
U.S. crude settled down 2.08 per cent, or $1.26 at $5 a barrel, and Brent settled the session at $64.06 per barrel, down 1.81 per cent, or $1.18.
In precious metals, safe-haven gold pushed past $4,900 per ounce for the first time powered by ongoing geopolitical tensions, a softer U.S. dollar and expectations of Federal Reserve interest rate cuts, while silver and platinum prices also hit fresh record highs.
Spot gold rose 1.65 per cent to $4,916.20 an ounce. U.S. gold futures rose 1.57 per cent to $4,907.90 an ounce.
In cryptocurrencies, bitcoin fell 0.48 per cent to $89,763.86. Ethereum declined 2.42 per cent to $2,957.48.
