Politics

Global stocks saw a strong recovery on Wednesday, January 21, following a selloff the day before. This comeback came after US President Donald Trump announced that a framework for a future deal regarding Greenland had been established. While attending the World Economic Forum in Davos, Trump stated that the US would not enforce tariffs that were set to begin on February 1. Earlier, he had also mentioned that taking Greenland by force was not an option, which helped to ease concerns among investors. Wall Street closed higher on Wednesday, with the S&P 500 recording its largest one-day percentage increase in two months. The Dow Jones Industrial Average and Nasdaq Composite also experienced significant gains, marking their highest percentage increases since January 5 and December 19, respectively. Specifically, the Dow rose by 1.21 percent, the S&P 500 increased by 1.16 percent, and the Nasdaq Composite went up by 1.18 percent. The S&P 500's jump marked its biggest daily percentage rise since November 24. Matthew Smart, who is the director of financial planning and portfolio analysis at WWM Investments in Chicago, commented, “Markets aren’t rallying because they suddenly understand the endgame in Greenland. They’re rallying because uncertainty just got priced out. The signal from Donald Trump coming out of Davos is coordination, not confrontation, and that matters. Pulling back near-term tariffs while setting up a framework with NATO around Greenland signals to investors that this situation is moving from headline risk to negotiation risk.” MSCI’s All-World index rose by 0.87 percent after a decline in the previous session, while Europe’s STOXX 600 index edged down by 0.02 percent. Britain’s FTSE index increased by 0.11 percent. The VIX index, which gauges the demand for protection against significant fluctuations in the S&P 500, fell by more than 15 percent to 17, just a day after reaching its highest point since November. This index is frequently seen as a measure of investor anxiety.