Global Markets Rebound as Trump Backs Down on Tariff Threats
Stocks surged on Thursday, with major markets in the US, Europe, and Asia posting significant gains, as investors breathed a sigh of relief following US President Donald Trump’s decision to retract his threat of imposing tariffs on key European countries. The move came after Trump had previously announced plans to impose levies on nations opposing a US takeover of Greenland, sparking fears of a trade war.
The US president told the World Economic Forum in Davos that he would not take the Danish autonomous territory by force and later confirmed that he had retracted his tariff threat. This development led to a rally in US stocks, with the Dow rising by over 1% on Wednesday. Asian markets followed suit, with Tokyo, Hong Kong, and Seoul all posting gains.
The tech sector was a major driver of the market surge, with regional giants such as Nvidia, Samsung, and SK hynix enjoying significant gains. Nvidia’s CEO, Jensen Huang, told the World Economic Forum that the artificial intelligence industry required “trillions of dollars” in investment to develop and power generative AI models, sparking optimism among investors.
The threat of a trade war had weighed heavily on markets earlier in the week, with gold and silver hitting record highs as investors sought safe-haven assets. However, with the tariff threat lifted, these metals extended their losses on Wednesday. Analysts noted that the “Trump put” – the idea that significant losses in stocks would force the president to change course – appeared to be in play.
Key markets were up across the board, with the Nikkei 225 in Tokyo rising 1.7% and the Hang Seng Index in Hong Kong gaining 0.2%. In Europe, the FTSE 100 in London was up 0.7%, while the euro and pound both strengthened against the dollar. Oil prices, however, dipped slightly, with West Texas Intermediate down 0.3% at $60.43 per barrel.
The rebound in global markets reflects the significant impact of trade tensions on investor sentiment. As tensions ease, markets are likely to remain volatile, with investors closely watching developments in the US-Europe trade relationship. For now, however, the lifting of the tariff threat has provided a much-needed boost to markets, and investors will be watching to see if this momentum can be sustained.
