US stocks have staged a modest recovery after the sharpest equities sell-off in three months, as investors digested President Donald Trump’s comments at Davos, including a fresh push to acquire Greenland.
Speaking to world leaders in Davos, Switzerland, on Wednesday, Trump insisted only the United States can truly guarantee Greenland’s security.
Trump, however, signaled he wouldn’t “use force” to take control and called for immediate negotiations toward a deal to acquire Greenland.
Markets continued to be cautious after Tuesday’s rout, when all three major US indexes slid nearly two per cent on Trump’s warning that fresh tariffs could hit European allies unless the US is allowed to buy Greenland, an autonomous territory of Denmark.
“That likely put (hint of not using force) a floor in the recent sell-off was that we’re not going to use force to acquire Greenland. So that’s a sigh of relief for markets,” said Art Hogan, chief market strategist at B Riley Wealth.
“But we’re certainly concerned about reigniting a trade war.”
The CBOE Volatility index dropped from its mid-November highs touched in the previous session, down 1.22 points at 18.87.
US megacap companies Nvidia and Tesla, which were among the worst hit in Tuesday’s selloff, up 0.4 per cent each.
In early trading on Wednesday, the Dow Jones Industrial Average rose 203.56 points, or 0.42 per cent, to 48,692.15, the S&P 500 up 27.28 points, or 0.40 per cent, to 6,824.14 and the Nasdaq Composite gained 45 points, or 0.20 per cent, to 22,999.6.
Investors will also monitor remarks from other business and global leaders in Davos. Back in Washington, markets will watch the US Supreme Court as it hears arguments over Trump’s push to remove Federal Reserve Governor Lisa Cook.
It is also a busy week of US data, including third-quarter GDP, January PMI readings and the Personal Consumption Expenditures report, which is the Fed’s go-to inflation measure. Adding to the mix is a packed earnings calendar featuring Procter & Gamble and Intel, which should provide an insight into consumer demand and the overall economic momentum.
Netflix shares dropped 4.2 per cent after the streaming giant paused share buybacks to help fund the purchase of Warner Bros Discovery’s studio and streaming businesses.
United Airlines rose three cent after the carrier issued an upbeat outlook for the current quarter and the full year.
Peers American Airlines and Delta Air Lines rose over 1.5 per cent each.
Halliburton added 2.7 per cent after beating estimates for fourth-quarter profit.
Johnson & Johnson dipped 1.6 per cent despite forecasting 2026 sales and profit ahead of Wall Street estimates.
Of the 33 companies in the S&P 500 that reported quarterly earnings through last Friday, 84.8 per cent beat analysts’ estimates for profit, according to LSEG I/B/E/S data, compared to the long-term average of 67.3 per cent.
Among other stocks, US nuclear sector companies rose after Trump supported nuclear energy procurement.
NuScale Power was up 4.8 per cent, Nano Nuclear Energy gained four per cent and Sam Altman-backed Oklo rose 2.7 per cent.
Kraft Heinz slipped nearly one per cent after a regulatory filing showed Berkshire Hathaway may shed its 27.5 per cent stake in the consumer company.
https://thewest.com.au/business/markets/wall-st-edges-up-as-markets-digest-trumps-davos-speech-c-21382352
