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HomeMarket NewsWall Street rebounds on another TACO trade after Trump backs off on February 1 tariff threat
Futures on Wall Street had recovered before the start of the session when Trump said that he will not be using force to acquire Greenland, during his World Economic Forum speech in Davos. The TACO trade has resulted in a rebound in the US Dollar and a cool off in the Gold and Silver rally.
Benchmark indices on Wall Street reversed most of their losses from Tuesday's steep sell-off after US President Donald Trump announced that he will not be proceeding with the tariffs on European allies that he had earlier threatened to implement from February 1.
The Dow Jones gained nearly 600 points, while the S&P 500 saw its best day since November with over 400 stocks ending with gains on the index. The Nasdaq also gained over 1% in Wednesday's rebound, recovering some of Tuesday's losses.
Smallcap stocks on Wall Street outperformed the S&P 500 for the 13th straight session, the US Dollar saw a rebound, while the rally in Gold and Silver cooled off, even as prices remained elevated and near record levels.
Trump on Truth Social highlighted that he had a very productive meeting with Mark Rutte, the Secretary General of NATO, where a broader framework on a future deal with Greenland has been reached and the solution, if implemented, will not just benefit the US, but also the entire NATO. Trump did not elaborate further on what the framework is, neither on his social media, nor in his interview to CNBC.
Futures on Wall Street had recovered before the start of the session when Trump said that he will not be using force to acquire Greenland, during his World Economic Forum speech in Davos. Immediately after Trump's address, the European parliament suspended the trade deal with the US that was struck in July last year, delaying its ratification indefinitely citing persistent tariff threats from the US.
"We have been left with no alternative but to suspend work until the US decides to reengage on a path of cooperation rather than confrontation," Bernd Lange, the EU Parliament Trade Committee Chair was quoted as saying. However, there has been no remark from Europe after Trump backed off on his tariff push.
The focus shifts back to the market today with P&G, GE Aerospace, Intel, Capital One reporting results today, along with the Q3 GDP first revision data and the initial jobless claims. The delayed PCE inflation data for November last year will also be reported today.
