Wall Street Rebounds as Trump Says He Won’t Use Force to Take Greenland; US Stocks Recover From Worst Day

U.S. stock markets staged a strong recovery on Wednesday, bouncing back from their worst session since October after President Donald Trump said he would not use force to take Greenland. The reassurance helped calm investor nerves that had been rattled by geopolitical tensions and tariff threats, allowing major indices to claw back losses from the previous day.

US President Donald Trump Says, He Won't Use Force To Take Greenland: Wall Street Shows Recovery

The benchmark S&P 500 jumped 1.1% as of mid trade session, recovering a significant portion of Tuesday's 2.1% decline and moving closer to the all-time high it set earlier this month. The rebound came after Trump told business and government leaders at the World Economic Forum in Davos that he would not resort to military action to acquire what he referred to as "the piece of ice."

Trump's Remarks Ease Market Fears

Trump's comments marked a softening in rhetoric after markets were unsettled by his earlier threats to impose tariffs on Europe over its resistance to transferring Greenland, an autonomous territory of Denmark, to U.S. control. While reiterating his desire to make Greenland part of the United States, Trump emphasised that he would pursue "immediate negotiations" rather than force.

U.S. stock futures had been trading in the red before Trump's statement, extending losses from Tuesday. However, sentiment quickly turned positive once investors interpreted his remarks as a sign of de-escalation.

US Stock Market: Major Indices Open Higher

Wall Street opened higher on Wednesday following Trump's comments. In early trading, the Dow Jones Industrial Average rose 0.4% to 48,697.73, while the S&P 500 gained 0.3% to 6,819.92. The Nasdaq Composite edged up 0.2% to 22,988.96.

By late morning, the rally strengthened further. The Dow was up 477 points, or about 1%, while the Nasdaq climbed 1.3%, reflecting broad-based buying across sectors.

Bonds, Dollar Stabilise as Risk Appetite Improves

Treasury yields eased in the bond market after jumping a day earlier, a move that had signaled investor anxiety over long-term inflation risks. The pullback in yields was aided by a calming in Japanese government bond markets, which had surged earlier amid concerns about rising debt levels in the world's third-largest economy.

The U.S. dollar also steadied against major currencies such as the euro and Swiss franc after weakening in the previous session, suggesting reduced demand for defensive positioning.

Trump himself acknowledged that his comments about Greenland contributed to Tuesday's market sell-off, but he dismissed the drop as "peanuts" compared to the gains recorded during the first year of his second term, adding that markets would rise further in the future.