U.S. stock index futures were pointing higher ahead of Thursday’s open, suggesting equities could extend the strong rebound recorded in the previous session.
Markets appear to be drawing support from easing tensions surrounding President Donald Trump’s push to gain control of Greenland. On Wednesday, Trump ruled out the use of military force and later said he had reached the “framework” of an agreement related to the Arctic territory.
Following what Trump described as a “framework” deal reached with NATO Secretary General Mark Rutte, the president also stepped back from threats to impose sanctions on European countries that had opposed his plans.
Some market participants have framed the rally as a return of the so-called “TACO trade,” shorthand for “Trump Always Chickens Out,” a reference to the perception that the president often retreats after unsettling markets with aggressive tariff rhetoric.
“There are a lot of similarities with the Liberation Day market wobble in April 2025 and now,” said Russ Mould, investment director at AJ Bell. “In both situations, Trump took an aggressive stance and then backed down after financial markets wobbled.”
He added, “The US president has a keen eye on what happens with bonds and stocks, and the last thing he wants is to be accused of destroying people’s wealth.”
Wall Street experienced pronounced swings on Wednesday. After opening sharply higher, stocks gave up much of their gains by late morning before rebounding strongly in the afternoon to finish the session well in positive territory.
All three major benchmarks posted solid advances, partially recovering from Tuesday’s steep losses. The Dow Jones Industrial Average jumped 588.64 points, or 1.2%, to 49,077.23. The Nasdaq Composite climbed 270.50 points, or 1.2%, to 23,224.82, while the S&P 500 rose 78.76 points, also 1.2%, to 6,875.62.
The choppy trading reflected investors digesting Trump’s evolving comments on Greenland. Early buying was sparked by his remarks at the World Economic Forum in Davos, Switzerland, where he explicitly ruled out military action.
“We probably won’t get anything unless I decide to use excessive strength and force, where we would be, frankly, unstoppable. But I won’t do that. Okay?” Trump said.
“Now everyone’s saying, ‘Oh, good.’ That’s probably the biggest statement I made, because people thought I would use force,” he continued. “I don’t have to use force. I don’t want to use force. I won’t use force.”
Instead, Trump called for “immediate negotiations” with Denmark to “discuss the acquisition of Greenland by the United States.”
As the session progressed, concerns over U.S.-Europe trade relations tied to the dispute briefly dampened enthusiasm. However, buying interest returned later in the day after Trump wrote on Truth Social that the “framework” agreement emerged from a “very productive” meeting with NATO’s secretary general.
Based on that understanding, Trump said he would not move forward with the tariffs he had threatened to impose on several European countries if they resisted his bid to acquire the Danish territory.
Sector-wise, oil service stocks were among the standout performers, lifted by rising crude prices. The Philadelphia Oil Service Index surged 4.8%, reaching its highest closing level in more than a year.
Computer hardware stocks also rallied strongly, with the NYSE Arca Computer Hardware Index jumping 4.4%. Biotechnology shares followed suit, pushing the NYSE Arca Biotechnology Index up 3.6%.
Semiconductor, transportation and housing stocks also showed notable strength, while software and gold-related shares moved against the broader market advance.