US close: Stocks rebound after Trump calls off new Europe tariffs

21st Jan 2026 21:41

(Sharecast News) - Major indices closed higher on Wednesday after Donald Trump called off new tariffs on European nations, claiming that a deal framework had been reached over Greenland.

At the close, the Dow Jones Industrial Average was up 1.21% at 49,077.23, while the S&P 500 advanced 1.16% to 6,875.62, and the Nasdaq Composite saw out the session 1.18% firmer at 23,224.82.

The Dow closed 588.64 points higher on Wednesday, reclaiming some losses recorded by the blue-chip in what was its worst daily performance since October.

Trump ruled out any military action in his desire to acquire Greenland, but said he was "seeking immediate negotiations to once again discuss the acquisition of Greenland by the United States". Speaking in Davos, Treasury Secretary Scott Bessent also noted that the administration was "not concerned" about the previous session's sharp sell‑off.

Fears surrounding the prospect of further tariff escalation between the US and Europe still remained in focus. Also at the World Economic Forum, French president Emmanuel Macron said the EU could respond to any new US tariffs by deploying its Anti‑Coercion Instrument, a measure that would restrict American firms from accessing the single market. Triggering the ACI could bar US suppliers from EU public tenders, impose export and import restrictions and limit foreign direct investment.

However, Trump later stated: "Based upon a very productive meeting that I have had with the Secretary General of NATO, Mark Rutte, we have formed the framework of a future deal with respect to Greenland and, in fact, the entire Arctic Region.

"Based upon this understanding, I will not be imposing the Tariffs that were scheduled to go into effect on February 1st.

Elsewhere, Supreme Court justices expressed concerns about whether or not Trump had the authority to fire Federal Reserve governor Lisa Cook, with Justice Brett Kavanaugh telling a Trump administration lawyer that arguments the president could fire Cook without judicial review "would weaken, if not shatter, the independence of the Federal Reserve".

In the corporate space, Johnson & Johnson issued better-than-expected FY26 guidance on Wednesday and also reported Q4 earnings that topped estimates, while oil services giant Haliburton traded higher after posting Q4 revenue and earnings that came in ahead of Wall Street estimates. Netflix was also in focus after the streaming giant posted a narrow Q4 earnings and revenue beat and revealed it had reached 325m global paid subscribers.

On the macro front, US mortgage applications rose 14.1% week-on-week in the week ended 16 January, extending the 28.5% surge in the previous period, according to the Mortgage Bankers Association. The sharp back-to-back increases came alongside a drop in the benchmark 30-year mortgage rate to a 16-month low of 6.16%. Applications to refinance a mortgage rose 20%, while applications for a mortgage to purchase a new home increased 5%.

On another note, construction spending rose 0.5% month-on-month in October, according to the Census Bureau, following a 0.6% decrease in September and above market estimates of a 0.1%. Private sector spending rose by 0.6%, with a 1.3% increase in the residential sector offsetting a 0.2% fall in the non-residential market. On annualised basis, construction spending fell 1%.

Finally, contracts to purchase previously owned US homes fell to a five-month low in December, according to the National Association of Realtors, as concerns regarding the US labour market and an ongoing shortage of entry-level houses offset a drop in mortgage rates. The NAR's pending home sales index plunged 9.3% to 71.8, the lowest level since July. Year-on-year, pending home sales dropped 3.0%.

Reporting by Iain Gilbert at Sharecast.com

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Johnson & Johnson (JNJ) $218.01 -0.09%

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Micron Technology Inc. (MU) $389.11 6.61%

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