(NEW YORK) — Stocks closed markedly higher on Wednesday after President Donald Trump backed off of tariff threats over Greenland. The major indexes recovered most of the losses they suffered the day before amid trade tensions centered on the Danish territory.
The Dow Jones Industrial Average climbed 588 points, or 1.2%, while the S&P 500 jumped 1.1%. The tech-heavy Nasdaq increased 1.1%.
U.S. stocks surged on Wednesday afternoon after Trump said he would retract his proposed tariff, which had been set to hit products from seven European Union members, plus the U.K., on Feb. 1.
Earlier in the day, stocks ticked up but remained relatively muted after Trump ruled out use of the military in his push for Greenland during a speech at the World Economic Forum in Davos, Switzerland.
Minutes after the speech, European lawmakers suspended a trade agreement with the United States over Trump’s then-ongoing tariff threats.
The EU and U.S. struck the trade agreement in July, moving to decrease tariffs on European goods and restore stability to the commercial relationship. At the time, European Commission President Ursula von der Leyen said the agreement “creates certainty in uncertain times.”
European officials described Trump’s new round of levies as a threat to Greenland, a self-governing territory of EU-member Denmark.
Under Trump’s plan, eight European nations – including Denmark, France, Germany and the United Kingdom – were set to be slapped with 10% tariffs beginning on Feb. 1. Those levies are set to escalate to 25% on June 1.
Trump issued a social media post around 2:30 p.m. ET in which he announced he was rolling back the tariff threat on account of a “framework” deal with NATO on Greenland.
“This solution, if consummated, will be a great one for the United States of America, and all NATO Nations,” Trump said, adding that further negotiations would be overseen by Vice President JD Vance and Secretary of State Marco Rubio, among others. The president provided no details about the framework deal he announced.
Stocks climbed within minutes of the social media post. Meanwhile, U.S. Treasury yields fell, reversing an uptick a day earlier.
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