European stocks are expected to open higher after US President Donald Trump backed away from his tariff threat against Europe, easing concerns of a renewed trade war and lifting global market sentiment.
Futures linked to major European indexes climbed around 1%, following gains in Asian markets and Wall Street. US equity-index futures also moved higher, suggesting the rally could extend as investors respond positively to easing geopolitical and trade tensions.
AI Rally Powers Global Tech and Semiconductor Shares
Global semiconductor stocks advanced after Nvidia CEO Jensen Huang reinforced optimism around artificial intelligence during remarks at the World Economic Forum in Davos.
Shares of Disco Corp., a key Nvidia supplier, surged 17% in Japan, while Samsung Electronics gained 2.3%. South Korea’s benchmark index, a bellwether for technology stocks, climbed to a record high, reflecting strong investor appetite for AI-driven growth.
Risk Appetite Improves, Safe Havens Lose Ground
The improving outlook reduced demand for safe-haven assets. Spot gold fell 0.2%, while a Bloomberg gauge of the US dollar was little changed.
Risk sentiment strengthened after Trump ruled out military action and signaled he would refrain from imposing tariffs on Europe, citing a “framework” agreement related to Greenland. Markets interpreted the comments made in Davos as a sign that geopolitical and trade risks are easing.
“The framework of the Greenland deal takes down the temperature significantly,” said Joe Gilbert, portfolio manager at Integrity Asset Management. “Fewer tariffs are clearly positive for markets.”
Bonds, Rates and Crypto Show Mixed Moves
In fixed-income markets, Japanese government bonds rebounded for a second consecutive session. Meanwhile, Australia’s three-year bond yield rose to its highest level since November 2023 after unemployment unexpectedly declined in December, prompting traders to increase bets on an early interest-rate hike.
Cryptocurrencies edged lower, with Bitcoin trading near $90,000, as expectations grew that US crypto-market legislation could be delayed.
Greenland Shift Helps Calm Market Volatility
Trump did not provide detailed terms of the proposed Greenland “framework” agreement, while Denmark reiterated it would not negotiate over ceding control of the semi-autonomous territory. Still, investors viewed the softer rhetoric as a stabilizing signal.
Bloomberg strategists noted that easing tensions pushed equities back toward their default upward bias, as volatility declined and optimism around global growth returned.
“Confidence in the ‘Trump Put’ strengthened,” wrote Dilin Wu, a strategist at Pepperstone Group, noting that investors rapidly rebuilt risk exposure after cutting positions earlier in the week.
Trump’s remarks marked a sharp reversal after days of brinkmanship that had rattled markets, previously sending stocks, bonds, the dollar and cryptocurrencies lower.
Corporate Highlights
- OpenAI CEO Sam Altman is reportedly in talks with Middle Eastern investors for a funding round that could reach $50 billion
- Volkswagen AG exceeded cash forecasts in its automotive division after delaying EV investments
- Renault SA plans to reintegrate its Ampere EV and software unit amid weaker-than-expected demand
- Telenor ASA agreed to sell its stake in Thailand’s True Corp for 39 billion kroner ($3.9 billion)
