Trump calls off tariffs on European allies

General market commentary

Equity markets staged a strong rebound in Wednesday’s session as investor sentiment improved following President Trump’s announcement of a framework for a future deal over Greenland and his decision to call off planned tariffs on European allies. Major US equity benchmarks all rose by around 1.2 percent, recovering more than half of the sharp losses seen in the previous session. The rally was broad based, with all sectors advancing and energy, healthcare and materials among the strongest performers, reflecting a renewed appetite for risk after fears of an imminent trade dispute between the US and Europe eased.

Company news was mixed but did little to derail the broader advance. Shares in Western Digital jumped sharply after a bullish broker update, while Kraft Heinz fell after filing to register the resale of a large stake held by Berkshire Hathaway. Netflix shares slipped modestly despite reporting better than expected fourth quarter results, as its outlook disappointed investors. Overall, Wednesday’s gains reflected relief that geopolitical tensions had temporarily cooled, allowing equities to recover as markets looked past near term uncertainty and focused on improving risk sentiment.

Latest market and economic update

Asian equities mostly advanced on Thursday, following Wall Street’s rebound as tensions eased over US demands on Greenland. South Korean equities outperformed, with the KOSPI hitting a record high on strength in chips and autos. Japanese equities rebounded, while Chinese markets lagged and Hong Kong edged lower.

US equity futures rose overnight as tensions with Europe eased after Trump announced a Greenland framework deal. S&P 500 futures gained 0.2%, Nasdaq 100 futures rose 0.3%, and Dow Jones futures added 0.1%. In after-hours trading, Intel shares jumped nearly 12%, while attention today turns to weekly jobless claims and upcoming corporate earnings.

European equities traded mixed Wednesday as Trump’s Greenland comments kept investors cautious. Germany’s DAX fell 0.5%, while France’s CAC 40 and the UK’s FTSE 100 rose 0.1%. Burberry and Premier Foods reported strong quarterly results, Atos met revenue targets, and Inpost saw 25% parcel growth.

The US dollar held steady around 98.8, maintaining recent gains as geopolitical and trade tensions over Greenland eased. President Trump ruled out military action and tariff threats on European NATO allies, supporting sentiment. The dollar was steady against the euro at $1.17, while weakening versus the Australian and New Zealand dollars, as safe-haven demand for franc and gold eased.

Oil prices were steady in Asian trade as President Trump eased tariff threats over Greenland, improving market sentiment. Brent and WTI edged slightly higher, supported by supply disruptions in Kazakhstan. Gains were capped by rising US crude and fuel inventories, signalling weaker demand, despite the IEA raising its 2026 oil demand growth forecast.

Equities on the move

The following companies experienced moves in their share price driven by analyst ratings, quarterly earnings, or other news:

SoftBank shares surged over 13% this morning, leading Asian technology gains after NVIDIA CEO Jensen Huang’s upbeat World Economic Forum comments on AI. Japanese chip suppliers Advantest and Tokyo Electron, South Korea’s Samsung and SK Hynix, and Taiwan’s TSMC also rose. Huang described AI as critical infrastructure, boosting sentiment in tech and AI equities across the region.

Apple plans to transform Siri into its first AI chatbot, code-named Campos, later this year. Integrated across iPhone, iPad and Mac, it will replace the current Siri interface and use a high-end Google Gemini model. Campos will support voice and typing, forming a key part of Apple’s AI push, while an AI-powered wearable may arrive by 2027.

Baidu shares hit a near three-year high in Hong Kong after the firm officially launched its Ernie 5.0 AI model. The equity rose over 4%, beating the Hang Seng. Baidu said the 2.4-trillion-parameter model outperforms rivals, following strong user growth and sustained investment in artificial intelligence, and reinforcing its leadership in China’s expanding AI sector.

Johnson & Johnson forecast 2026 sales of $99.5–$100.5 billion and earnings of $11.43–$11.63 per share, exceeding analyst estimates despite expected impacts from a U.S. drug pricing deal and $500 million in medical device tariffs. Q4 profit beat expectations, driven by strong performance in cancer and psoriasis treatments, medical devices, and the Innovative Medicine division.

Halliburton beat Q4 profit estimates, reporting 69 cents per share versus 55 cents, driven by strong international demand in Brazil, the North Sea, Africa, and Mexico, while North American revenue remained flat. Shares rose by 4% and the company plans to re-enter Venezuela once commercial, legal, and payment terms are fully resolved.

Charles Schwab reported fourth-quarter earnings in line with expectations, with adjusted EPS of $1.39 and record revenue of $6.34 billion, up 19% year-on-year. Total client assets rose 18% to $11.9 trillion, supported by $163.9 billion in quarterly net new assets. Net interest margin and trading revenue also grew, while $2.7 billion in shares were repurchased.

AppLovin rejected a short-seller report alleging money-laundering ties, calling the claims “false, misleading and nonsensical.” The company highlighted its regulated status, strict KYC checks, and compliance measures, noting it cannot control shareholders. Shares fell 4.7%, but AppLovin maintains its platform and AI tools are not used for illicit activity.

Bill Hwang, founder of Archegos Capital Management, has sought a presidential pardon for his 2024 conviction over the fund’s 2021 collapse, which cost Wall Street banks over $10 billion. Convicted of wire fraud, securities fraud and market manipulation, Hwang was sentenced to 18 years. The Justice Department reviews applications before presidential decisions on clemency.

Goldman Sachs lifted its end-2026 gold forecast to $5,400 per ounce, citing sustained private sector and emerging market central bank demand. Other major banks remain bullish, with several targeting prices near $5,000 by 2026. Gold has already gained over 11% this year, supported by safe haven flows and diversification trends.

Danone shares fell over 8% after BofA reiterated an underperform rating, citing a sharp 17% decline in China births, which pressures the infant milk formula market, a key profit driver. Despite market share gains to 16.6%, slower growth is expected, with adjusted 2026–27 EBIT and earnings forecasts below consensus, highlighting regional demographic challenges.

Citi upgraded Abercrombie & Fitch to Buy after a 17% share drop it deemed unwarranted. Q4 sales rose 5%, with Hollister leading growth and Abercrombie returning to positive sales. Citi raised fiscal 2026 earnings to $11.35 per share and a $135 price target, citing steady sales, strong cash flow, and continued share buybacks.

Rothschild downgraded FedEx to Neutral, citing limited upside as the equity’s 37% rally already reflects value from the planned June spin-off of its less-than-truck load (LTL) business. The combined entity implies a $316 share price, near current levels. While constructive on FedEx’s parcel business, Rothschild sees greater long-term potential in the standalone LTL unit.

Kepler Cheuvreux sees 2026 as volatile for European aerospace and defence equities, with geopolitics and policy uncertainty affecting markets. Long-term growth is supported by robust order books, production recovery, and secured defence budgets. Investor focus will be on execution, cash leverage, and tech disruption. Preferred shares are Rheinmetall, Safran, Leonardo, Exail.

Bank of America upgraded Oklo to Buy after the company signed a binding agreement with Meta to develop a 1.2-gigawatt advanced nuclear campus. The deal, including $25 million in prepayments for early development, signals a shift from concept to execution. BofA raised long-term revenue forecasts to $5.9 billion by 2036, reflecting phased development.

Upcoming data and events

Thursday sees a slew of US economic data, including Q3 GDP, corporate profits, PCE inflation, consumer spending, and jobless claims. Energy inventories are reported, alongside Treasury bill and TIPS auctions. Key earnings releases include Procter & Gamble, GE Aerospace, Abbott, Intel, Intuitive Surgical, Capital One, Christian Dior, Investor AB, Freeport-McMoRan and CSX Corporation.

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