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U.S. stocks rallied for a second consecutive day on Thursday as investors responded positively to President Donald Trump’s retreat from previously threatened tariffs on European countries. The S&P 500 gained 0.5%, adding to substantial gains from Wednesday and recouping most of the losses incurred earlier in the week.
The Dow Jones Industrial Average climbed 306.78 points, or 0.6%, to close at 49,384.01, while the Nasdaq composite rose 0.9%, gaining 211.20 points to finish at 23,436.02. The S&P 500 added 37.73 points to end the session at 6,913.35.
Market sentiment improved markedly after Trump announced he had reached “the framework of a future deal with respect to Greenland” and subsequently canceled the 10% tariffs he had threatened to impose on European countries that opposed his interest in the Arctic island. The president’s reversal triggered a significant market recovery, exemplifying what some traders have dubbed the “TACO” pattern – “Trump Always Chickens Out” when markets react strongly enough to his initial threats.
This latest episode follows a familiar playbook where the president makes dramatic economic threats, observes the market reaction, and then adjusts his position. Tuesday’s market selloff was the worst since October, significant enough that Trump publicly acknowledged “the dip.” The strategy, while creating initial market volatility, has previously enabled the president to secure deals that outsiders might have deemed unlikely without his market-disrupting opening gambits.
Details regarding the Greenland framework agreement with NATO remain sparse, and no formal deal has been signed. Despite Thursday’s market gains, some indicators suggested lingering investor caution. Gold prices rose 1.6% after fluctuating between small gains and losses, typically a sign that investors are seeking safer assets. The U.S. dollar also weakened against the euro and several other major currencies.
Treasury yields remained relatively stable, suggesting that foreign investors maintained their positions in U.S. bonds. The 10-year Treasury yield briefly touched 4.28% following positive economic reports before settling at 4.25%, slightly down from Wednesday’s 4.26%.
Economic data released Thursday painted a picture of continued resilience in the U.S. economy. Weekly jobless claims came in lower than economists expected, potentially indicating that layoffs remain at low levels. Another report suggested that U.S. economic growth during the summer months was stronger than initial government estimates. Additionally, November inflation figures aligned closely with economists’ expectations, while consumer spending slightly exceeded forecasts.
Corporate earnings contributed to the market’s positive momentum. Northern Trust shares surged 6% after the financial services company reported better-than-expected fourth-quarter profits for 2025. CEO Michael O’Grady expressed optimism about “strong momentum across all our businesses” heading into 2026.
Consumer goods giant Procter & Gamble added 2.6% following strong profit results, though revenue fell just short of expectations amid what CEO Shailesh Jejurikar described as a “challenging consumer and geopolitical environment.”
In its stock market debut, crypto custodian BitGo rose 2.7% on the New York Stock Exchange after pricing its initial public offering at $18 per share, above its earlier estimated range of $15 to $17.
JPMorgan Chase gained 0.5% despite a lawsuit filed by Trump, who accused the bank of closing his accounts for political reasons following his departure from office in 2021.
These positive performers helped offset disappointing news from spice manufacturer McCormick & Co., which dropped 8.1% after reporting profits below expectations. CEO Brendan Foley cited ongoing cost pressures due to “a shifting global trade environment.”
Global markets also responded favorably to Trump’s tariff retreat, with Japan’s Nikkei 225 jumping 1.7% and Germany’s DAX rising 1.2%. International investors were further reassured by easing long-term yields in Japan’s bond market, which had spiked earlier in the week on concerns about potential government debt increases. The 40-year Japanese government bond yield fell below 4% on Thursday after reaching a record 4.22% on Tuesday.
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9 Comments
The reversal on Greenland tariffs is a relief for European markets, though it remains to be seen if this is just a temporary reprieve or part of a broader de-escalation of trade tensions. Investors will be watching closely for any new developments.
It’s interesting to see how quickly the market can bounce back from Trump’s threats, even if the underlying issues remain unresolved. This speaks to the resilience of the US economy, but also the fickleness of investor sentiment in the face of political noise.
The mining and commodities sectors will be closely watching these developments, as trade uncertainty can have a big impact on demand and pricing. A more stable trading environment would be welcome news for those industries.
While the latest move is positive for markets in the short term, I can’t help but wonder if Trump is just playing a longer game here. His negotiating style is so unpredictable that it’s hard to say what his true intentions are. Caution may still be warranted.
The mining and energy sectors will be closely watching these trade developments, as they can have a big impact on commodity prices and demand. A more stable, predictable trade environment would be welcome news for those industries.
This back-and-forth on tariffs creates a lot of uncertainty for businesses and consumers. While the latest move is positive, it underscores the unpredictability of the administration’s trade policy. Steady, consistent leadership would likely be better for economic growth.
The “TACO” pattern is an interesting way to characterize Trump’s negotiating style. It suggests he may be more interested in the drama of threats than the actual outcomes. Hopefully this latest reversal is a sign of a more pragmatic approach going forward.
Interesting to see how markets react to Trump’s policy shifts. It seems his tariff threats often end up being more bark than bite when the economic impact becomes clear. I wonder if this pattern will continue or if he’ll take a harder stance at some point.
While the market rebound is welcome, I’m curious to see if this represents a lasting shift or just a temporary relief rally. The underlying trade tensions don’t seem to have been fully resolved, so further volatility may be ahead.