By Rosemary
U.S. stocks moved higher Thursday, extending a rebound that has erased most of the week’s earlier losses after President Donald Trump backed away from tariffs that had rattled global financial markets.
The S&P 500 rose 0.4%, building on a strong gain from Wednesday after Trump announced what he described as “the framework of a future deal with respect to Greenland” and abandoned a proposed 10% tariff on several European countries he had accused of opposing U.S. ambitions involving the Arctic island. The index has now recovered the bulk of the decline triggered earlier in the week when Trump’s tariff threats sparked one of Wall Street’s sharpest sell-offs since October.
The Dow Jones Industrial Average climbed about 260 points, or 0.5%, by mid-morning in New York, while the Nasdaq composite gained 0.6%, reflecting renewed investor appetite for risk after days of turbulence.
The market’s reaction underscores a familiar pattern during Trump’s presidency: bold initial threats that unsettle investors, followed by partial or full reversals once financial markets react sharply. That dynamic has given rise to the tongue-in-cheek market acronym “TACO,” short for “Trump Always Chickens Out,” reflecting traders’ belief that severe market backlash can prompt policy retreats. Tuesday’s sell-off was severe enough that Trump, who frequently highlights market gains as a measure of economic success, publicly acknowledged what he called “the dip.”
Still, supporters of the president argue that the strategy of maximal pressure can produce outcomes that might otherwise be unattainable. In several cases, dramatic opening moves have been followed by negotiations that yield compromises or tentative agreements, even if details remain limited or unresolved.
In this instance, concrete information about the Greenland framework remains scarce. Trump has not released specifics, and the arrangement he referenced has not been formalized or signed. Nevertheless, the mere pause in tariff escalation was enough to stabilize markets that had been bracing for a renewed trade conflict between the United States and key allies.
Signs of calmer sentiment were visible across financial markets. Gold prices, which had surged toward record levels earlier in the week as investors sought safety, leveled off as demand for havens eased. The U.S. dollar strengthened against several currencies, though it slipped against the euro after a sharp decline earlier in the week when foreign investors reduced exposure to U.S. assets.
In the bond market, Treasury yields were relatively steady following a series of economic reports that painted a picture of continued resilience in the U.S. economy. Weekly data showed fewer Americans filing for unemployment benefits than economists had expected, suggesting layoffs remain limited despite a cooling labor market. Another report revised economic growth higher for the summer months, indicating stronger momentum than previously estimated.
Additional data showed inflation in November largely in line with expectations, while consumer spending came in slightly stronger than forecast. Together, the reports helped keep the yield on the benchmark 10-year Treasury at about 4.26%, unchanged from late Wednesday.
Corporate earnings also influenced trading. Shares of Northern Trust jumped 5.8% after the financial services firm reported stronger-than-expected profits for the end of 2025. Chief executive Michael O’Grady said the company is entering 2026 with “strong momentum across all our businesses,” boosting investor confidence.
Procter & Gamble rose 2.1% after posting profits that exceeded analysts’ expectations. Revenue, however, narrowly missed forecasts, reflecting what CEO Shailesh Jejurikar described as a “challenging consumer and geopolitical environment” affecting global demand.
Generac, a maker of power generators, gained 4.1% as forecasters warned that a potentially severe ice storm could impact a wide swath of the United States, increasing demand for backup power equipment.
Those gains helped offset a sharp decline in McCormick & Co., which fell 6.3% after reporting profits that missed expectations. The spice maker cited rising costs linked to what its chief executive, Brendan Foley, called a “shifting global trade environment.”
Attention also turned to the debut of BitGo, a firm that provides digital asset custody and management services to cryptocurrency companies and traditional financial institutions. Its shares were set to begin trading on the New York Stock Exchange later in the day after the company priced its initial public offering at $18 per share, above its earlier projected range.
Markets overseas also advanced, buoyed by relief over the easing of U.S. trade tensions. Stock indexes climbed across Europe and Asia, with Japan’s Nikkei 225 jumping 1.7% and France’s CAC 40 rising 1.1%, among the strongest performances globally.
Global sentiment was further supported by easing pressure in Japan’s bond market. Long-term Japanese government bond yields, which had spiked earlier in the week amid concerns about fiscal policy and rising debt, retreated. The yield on the 40-year bond fell back below 4% on Thursday after briefly reaching a record 4.22% earlier in the week.
Taken together, the moves reflected a broader sense of relief among investors after days of uncertainty. While questions remain about U.S. trade policy and the durability of recent diplomatic overtures, markets appeared reassured by the absence of immediate new tariffs and by economic data suggesting the world’s largest economy remains on solid footing.