Both the S&P 500 ETF (SPY) and the Nasdaq 100 ETF (QQQ) closed higher on Wednesday after President Trump pulled back tariffs on eight European countries and announced a framework deal that wouldn’t involve using military force to purchase Greenland.
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Alongside NATO Secretary General Mark Rutte, Trump has formed a framework deal to acquire Greenland. Earlier in the day, he ruled out using force to take over the self-governing territory, easing geopolitical tensions.
“Based upon this understanding, I will not be imposing the Tariffs that were scheduled to go into effect on February 1st,” Trump said in a Truth Social post. “Additional discussions are being held concerning The Golden Dome as it pertains to Greenland.” Trump didn’t specify the terms of the deal, although he told CNBC that it would be permanent with the details to be publicized soon. He added that the negotiations would be led by Vice President JD Vance, Secretary of State Marco Rubio, Special Envoy Steve Witkoff, and “various others.”
Trump had previously stated that the tariffs would remain in effect until the U.S. reached a deal to purchase Greenland. Danish Foreign Minister Lars Løkke Rasmussen acknowledged the withdrawal of the tariffs as a positive sign, although he reiterated that Denmark wouldn’t be able to accommodate Trump’s requests.
Several financial leaders are in attendance at the World Economic Forum Annual Meeting in Davos, Switzerland, including JPMorgan Chase (JPM) CEO Jamie Dimon and Citadel CEO and founder Ken Griffin. During a panel interview, Dimon warned that Trump’s proposed credit card interest rate limit would be an “economic disaster” for Americans. “In the worst case, you’d have to have a drastic reduction of the credit card business,” Dimon said. “You would remove credit from 80% of Americans and that is their backup credit.”
Meanwhile, Griffin stressed that “recent research” indicates that the Trump administration’s tariffs have “come at the expense of the American people.” A study published this week by the Kiel Institute, a German research firm, concluded that Americans have paid for 96% of the tariffs, while foreign exporters have absorbed just 4%.
Looking ahead, the Bureau of Economic Analysis will release its second estimate of gross domestic product (GDP) for the third quarter on Thursday, while the Department of Labor will publish initial and continuing jobless claims.
The S&P 500 (SPX) closed with a 1.16% gain, while the Nasdaq 100 (NDX) returned 1.36%.