Trump Withdraws Tariff Threat on Greenland, Markets Rally on De-escalation

U.S. President Donald Trump on January 21 withdrew a threat to impose tariffs set for February 1, citing a framework deal with NATO on Greenland’s future following talks with Secretary General Mark Rutte in Davos. U.S. stocks surged, with the S&P 500 up 1.4%, while the 10-year Treasury yield fell 4.2 basis points to 4.255%. The U.S. dollar index rose 0.1% to 98.79. Sahak Manouelian of Wedbush Securities said markets reacted positively to the removal of tariff and military action risks. Karl Schamotta at Corpay noted the episode ended early-year complacency, reminding investors of underlying geopolitical risks. Michael Brown at Pepperstone called the move predictable, describing it as an "escalate to de-escalate" strategy, with focus now returning to strong equity fundamentals and upside risks for the dollar. Matt Weller of StoneX highlighted a relief rally, particularly in FX, stating the absence of escalation matters more than deal specifics.