The U.S. stock market staged another strong advance, extending the US stock market rebound as investors reacted positively to easing trade tensions and steady economic signals. After a volatile start to the week, Wall Street found relief when President Donald Trump walked back previously threatened tariffs on several European countries, helping restore risk appetite across global markets.
Wall Street Extends Its Recovery
The US stock market rebound gathered pace in early Thursday trading. The S&P 500 Index ($SPX) rose roughly 0.7%, adding to the previous session’s sharp gains. The Dow Jones Industrial Average climbed by several hundred points, while the Nasdaq Composite advanced close to 1%, supported by strength in technology shares.
Market sentiment improved significantly after President Trump said he had reached a “framework” agreement related to Greenland and Arctic security and would abandon tariffs that had rattled markets earlier in the week. Those threats, which targeted multiple European allies, had triggered the steepest losses since October before the reversal sparked a swift recovery.
Tariff Walkback Calms Investor Fears
Trade policy uncertainty has been a major driver of volatility, making the tariff reversal a key catalyst for the US stock market rebound. Earlier fears centered on potential damage to U.S.-European relations and the broader global economy. Trump’s comments at the World Economic Forum in Davos, where he ruled out the use of military force and emphasized cooperation with NATO, helped reassure investors.
Futures markets reflected that optimism ahead of the opening bell, with contracts tied to major U.S. indices pointing higher. Although stocks remained modestly lower for the week overall, momentum had clearly shifted toward recovery.
Company Movers: Winners and Losers
Individual stocks delivered mixed signals within the broader US stock market rebound. Generac Holdings (NYSE:GNRC) gained about 3% as forecasts of a potentially severe ice storm increased expectations for demand for backup power solutions.
On the downside, Procter & Gamble (NYSE:PG) slipped after reporting quarterly results that narrowly beat profit expectations but missed on revenue. The consumer goods giant also trimmed part of its full-year profit outlook, weighing on shares.
McCormick & Company (NYSE:MKC) dropped sharply after missing earnings targets and issuing cautious guidance, citing ongoing pressure from elevated commodity costs. Meanwhile, railroad operator CSX (NASDAQ:CSX) remained in focus ahead of its earnings report after the market close.
Economic Data and the Bond Market
Macroeconomic indicators also played a role in shaping the US stock market rebound. Investors digested new data on jobless claims and an updated estimate of U.S. gross domestic product, along with delayed inflation reports for November and December. Overall, the data offered reassurance that the economy remains resilient.
In the bond market, U.S. Treasury yields were relatively stable. The yield on the 10-year Treasury eased slightly to around 4.25%, reflecting calmer investor sentiment and reduced demand for safe-haven assets as equities recovered.
Global Markets Join the Rally
The US stock market rebound was mirrored overseas. In Europe, major benchmarks advanced at midday, with Germany’s DAX and France’s CAC 40 each rising more than 1%. The United Kingdom’s FTSE 100 also moved higher, though gains were more modest.
Asian markets posted broad advances. Japan’s Nikkei 225 surged, led by technology names such as SoftBank Group (TYO:9984), which jumped sharply, and Disco Corp. (TYO:6146). Chip-testing equipment maker Advantest (TYO:6857) also recorded solid gains.
In South Korea, the Kospi Index closed higher after briefly crossing a key psychological milestone, with semiconductor leaders SK Hynix (KRX:000660) and Samsung Electronics (KRX:005930) contributing to the rally. Other regional markets, including Australia, Taiwan, and India, also finished in positive territory.
Commodities Reflect Reduced Anxiety
Commodities markets echoed the easing of investor fears. Gold prices edged lower after previously surging past key levels as investors sought safety during the height of tariff concerns. Oil prices also declined, with both U.S. crude and Brent crude sliding as traders reassessed demand expectations amid calmer geopolitical headlines.
Currency markets showed the U.S. dollar strengthening against the Japanese yen, prompting speculation about potential intervention should the yen weaken further.
What Comes Next for Markets?
While the US stock market rebound has restored confidence, questions remain about sustainability. Trade policy remains unpredictable, and upcoming economic data and corporate earnings will test whether the recovery can hold. For now, investors appear willing to embrace risk again, encouraged by policy de-escalation and steady economic fundamentals.
In the near term, markets are likely to remain sensitive to headlines, but the latest rally underscores how quickly sentiment can shift when uncertainty eases—even temporarily.
Featured Image – Freepik
