Nothing calms markets quite like a tariff threat disappearing into thin air. That's exactly what happened Wednesday afternoon when President Donald Trump announced he was canceling the 10% tariffs on European Union countries that were set to kick in on Feb. 1.
The reason? Progress on Greenland. Yes, Greenland.
In a post on Truth Social, Trump said he'd held a "very productive" meeting with NATO Secretary General Mark Rutte and that the two sides had hammered out the early framework of a deal involving Greenland and the broader Arctic region.
"We have formed the framework of a future deal with respect to Greenland and, in fact, the entire Arctic Region," Trump said.
"This solution, if consummated, will be a great one for the United States of America, and all NATO Nations."
Trump added that negotiations would continue beyond Greenland, mentioning discussions around something he referred to as "The Golden Dome as it pertains to Greenland." Vice President JD Vance, Secretary of State Marco Rubio, and Special Envoy Steve Witkoff will reportedly lead those talks.
How Markets Responded
Stocks didn't just rally. They surged across the board, with participation spreading well beyond the usual suspects.
The Russell 2000 jumped 2.0% to close at 2,697.66, leading the charge as small-cap stocks responded most aggressively to the easing trade tensions. The Nasdaq 100, tracked by the Invesco QQQ Trust (QQQ), climbed 1.9%. Both the Dow Jones Industrial Average and the S&P 500 advanced 1.6%.
The Magnificent Seven tech stocks alone added more than $400 billion in market capitalization, with heavy lifting from NVIDIA Corp. (NVDA), Alphabet Inc. (GOOG), Apple Inc. (AAPL), Tesla Inc. (TSLA), and Meta Platforms Inc. (META).
The Big Movers
Looking at stocks with market caps above $50 billion, the strongest performers in the final hour of trading painted a picture of broad-based risk appetite. Here's who led the pack:
It's worth noting the mix here. You've got infrastructure plays like GE Vernova and Vertiv, pharma giants like Novo Nordisk, semiconductor and AI-adjacent names like AMD and Palantir, and even nuclear energy exposure through Cameco. That kind of diversity suggests investors weren't just piling into one sector—they were broadly de-risking after days of tariff anxiety.
The takeaway? When tariff threats retreat, capital flows back into risk assets fast. And when the president ties trade policy to geopolitical chess moves in the Arctic, markets will take the win and ask questions later.
