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Stocks rise in tandem on Trump’s rollback of ‘Greenland tariffs’… Dow up 1.2% [New York Market Briefing]
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Summary
- Trump said Wall Street’s three major indexes rose in tandem after he rolled back the 10% tariff he had warned would be imposed on eight European countries.
- The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite each closed up more than 1%, while shares of big tech and semiconductor companies such as Nvidia, Tesla, and Intel posted gains.
- The CME FedWatch Tool reflected a 95.0% probability of a rate hold, and the Cboe Volatility Index (VIX) slid 15.88% to 16.90, signaling easing volatility.
U.S. stocks closed higher across the board after President Donald Trump rolled back tariffs he had warned would be imposed on eight European countries.
On the 21st (local time) on the New York Stock Exchange (NYSE), the Dow Jones Industrial Average rose 588.64 points (1.21%) from the previous session to finish at 49,077.23. The S&P 500 gained 78.76 points (1.16%) to 6,875.62, while the Nasdaq Composite, weighted toward tech shares, jumped 270.50 points (1.18%) to close at 23,224.82.
Trump said he had decided to scrap the 10% tariff that was set to take effect on the 1st of next month on eight European countries that oppose U.S. annexation of Greenland.
Attending the World Economic Forum (WEF) Annual Meeting in Davos, Switzerland, Trump wrote on his social media platform Truth Social that “based on a very productive meeting with NATO Secretary General Mark Rutte, we created a framework for a future agreement on Greenland and effectively the entire Arctic region,” explaining the reason for the reversal.
Trump had previously said on the 17th that the U.S. would impose tariffs on eight countries—Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands and Finland—which had dispatched troops to Greenland: 10% starting next month and 25% from June 1.
Concerns that the threat of “Greenland tariffs” against European allies could trigger “Sell America” (selling U.S. assets) led to a “triple whammy” in markets a day earlier, with U.S. equities, U.S. Treasury prices and the dollar falling together.
On the day, major big tech stocks such as Nvidia (2.87%), Nvidia (2.87%), Tesla (2.91%) and Alphabet (1.98%) advanced, while key semiconductor names including Intel (11.72%), AMD (7.65%) and Micron (6.54%) also surged. Netflix fell 2.18% as profit-taking emerged despite fourth-quarter earnings beating estimates, with investors disappointed by the modest extent of the beat.
According to CME’s FedWatch tool, the fed funds futures market priced in a 95.0% probability that the U.S. central bank (Fed) would hold rates steady this month.
The Cboe Volatility Index (VIX) fell 3.19 points (15.88%) from the previous session to 16.90.
Go Jeong-sam, Hankyung.com reporter jsk@hankyung.com
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