The stock market bounced back from its worst day since October on Wednesday after President Donald Trump said he reached the framework of a deal about Greenland, an island he’s long coveted, and won’t impose tariffs he had threatened on several European countries.
In late day trading, the blue-chip Dow Jones Industrial Average climbed 1.2%, or nearly 600 points, to 49,072. The S&P 500 gained 1.1%, and the Nasdaq advanced more than 250 points, or 1.2%.
Trump said the deal, “if consummated, will be a great one for the United States of America” and its allies in the North Atlantic region. His announcement triggered an immediate move higher in the stock market, which had found some solace earlier in the day after Trump ratcheted down his rhetoric and told business and government leaders in Europe that he would not use force to take “the piece of ice.”
The de-escalation in tensions, which had ramped up earlier with talk of tariffs crossing the Atlantic, helped the S&P 500 recover much of its 2.1% drop from the day before and pull closer to its all-time high set earlier this month.
Treasury yields also eased in the bond market, a day after jumping in a potential signal of worries about higher inflation in the long term. They got help from a calming of bond yields in Japan, which surged earlier on concerns about the size of its government’s debt. The value of the U.S. dollar also clawed back some of its declines against other currencies after sliding the day before.
Trump has a history of making big threats that send financial markets sliding, only to pull back later and reach deals that are seen as less bad for the economy or for inflation than his initial suggestion.
On one hand, the pattern has given rise to the “TACO” acronym suggesting “Trump Always Chickens Out” if financial markets react strongly enough. On the other, Trump has ultimately struck deals that outsiders may have earlier considered unlikely, ones that he’s crowed about later.
The most obvious example is Trump’s announcement of high tariffs on “Liberation Day,” which eventually led to trade deals with many of the world’s major economies.
Helping to lead the stock market Wednesday was Halliburton, which rose 2.9% after the oil field services company reported a stronger profit for the latest quarter than analysts expected.
United Airlines climbed 2.7% after likewise reporting a better profit for the end of 2025 than expected. CEO Scott Kirby said that the airline’s strong momentum in revenue is continuing into 2026.
Here’s the latest on Trump’s negotiations with Greenland
They helped offset a 2.9% drop for Netflix. The streamer sank even though it reported a stronger profit than expected as investors focused instead on its slowing subscriber growth and its lower-than-expected forecast for profit in the current quarter.
Kraft Heinz sank 6.3% after Berkshire Hathaway warned investors Tuesday that it may be interested in selling its 325 million shares in the food giant that former CEO Warren Buffett helped create in 2015.
