Treasury yields also eased in the bond market in another signal of reduced worries among investors. Besides the progress on Greenland, they also got help from a calming of yields in Japan’s jumpy bond market. The value of the U.S. dollar, meanwhile, clawed back some of its declines against other currencies after sliding the day before.
Trump himself acknowledged how the U.S. stock market sold off on Tuesday because of his desire for Greenland, but he called it “peanuts compared to what it’s gone up” in the first year of his second term and said it would go up further in the future.
Trump has a history of making big threats that send financial markets sliding, only to pull back later and reach deals that are seen as less bad for the economy or for inflation than his initial suggestion.
On one hand, the pattern has given rise to the “TACO” acronym suggesting “Trump Always Chickens Out” if financial markets react strongly enough. On the other, Trump has ultimately struck deals that outsiders may have earlier considered unlikely, ones that he’s crowed about later. The most obvious example is Trump’s announcement of high tariffs on “Liberation Day,” which eventually led to trade deals with many of the world’s major economies.
All told, the S&P 500 rose 78.76 points to 6,875.62. The Dow Jones Industrial Average climbed 588.64 to 49,077.23, and the Nasdaq composite gained 270.50 to 23,224.82.
In the bond market, the yield on the 10-year Treasury eased to 4.25% from 4.30% late Tuesday. That’s almost all the way back to the 4.24% level where it was at on Friday.
In stock markets abroad, indexes were mixed in mostly modest movements across Europe and Asia.
Japan’s Nikkei 225 slipped 0.4%.
After surging as high as 4.22% on Tuesday, the yield on the 40-year Japanese government bond pulled back to 4.05% Wednesday.
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AP Business Writers Chan Ho-him and Matt Ott contributed.
