S&P500: US Indices Rebound Today as Trump’s Davos Speech Calms Market Fears

Stocks Rebound from Three-Month Low as Trump Softens Greenland Stance

The major U.S. stock indexes are slightly higher shortly after the opening on Wednesday after spending all of the pre-market session in the red, following their worst sell-off in three months on Tuesday. According to reports, the “sell America” movement continued to dominate the trade with foreign selling driving down U.S. assets like stocks, Treasuries and the dollar.

At 15:24 GMT, the blue chip Dow Jones Industrial Average is at 48893.88, up 405.29 or +0.84%. The benchmark S&P 500 Index is trading 6851.10, up 54.24 or +0.80% and the tech-weighted Nasdaq Composite is at 23137.272, up 82.949 or +0.80%.

Trump’s Davos Comments Spark Market Reversal

Comments from President Trump at the World Economic Forum in Davos, Switzerland this morning may have turned the market higher. The tone in the market shifted when Trump called for immediate negotiations with Denmark to discuss the acquisition of Greenland by the United States. He also said for the first time that he would not use military force in pursuit of the territory, CNBC reported.

Treasury Yields Surge as “Sell America” Trade Intensifies

Besides Trump and Greenland, investors have also been reacting to a spike in U.S. Treasury yields and a decline in the U.S. Dollar fueled by the so-called sell America trade. Higher yields tend to attract money from the stock market. Earlier today, the benchmark 10-year Treasury yield surged to 4.3%.

Mixed Signals from Washington and Wall Street

Although Treasury Secretary Scott Bessent told reporters in Davos on Wednesday that the Trump administration was “not concerned” about the previous day’s sell-off in Treasuries, others did express worries.

Joyce Chang, chair of global research at JPMorgan, in a note wrote, “America First is quietly driving diversification away from dollar assets, especially among government entities.”

Europe Threatens Retaliation as Trade War Looms

Trump is calling for negotiations, but some European leaders are looking into suspension of trade deals and retaliation like the European Union’s Anti-Coercion Instrument, which would restrict U.S. business’ access to Europe’s single market.

Long-Term Uncertainty Could Cap Stock Market Gains

From the looks of it, we seem to have the makings of a long-term situation if both sides decide to dig in. This would create more uncertainty that U.S. investors may try to dampen by selling off positions. Earnings and Fed rate cuts are predictable factors that investors can plan around, but it will be hard to avoid the impact of a prolonged trade war without dumping some stock investments. This is the main reason I see the stock market being capped over the near-term.

Sectors Show Resilience with Broad-Based Gains

The sectors are showing some resilience with their positive reaction to Trump’s comments. Traders are gobbling up stocks that had fallen this week across the board in all sectors except Consumer Staples, which are off by 0.63%. Energy is the leader with a 2.26% gain, followed by Materials, up 1.24%, and Industrials, which are posting a 1.28% gain.

Earnings Winners and Losers in Today’s Session

Stocks in the news include streaming giant Netflix, which is lower for the session after reporting earnings that narrowly beat the forecasts. United Airlines is up about 3% after the company told investors that it expects to generate record earnings in 2026 due to strong travel demand in recent weeks. Finally, Progress Software, a business software company, is up more than 7% on better-than-expected guidance.

Technical Outlook: Key 50% Level Tests Market Resolve

Technically, we’re focusing on the March E-mini S&P 500 Index futures contract and its reaction to the 50% level at 6809.50, which is the mid-point of the November to January range of 6583.00 to 7036.35.

Earlier today, the futures contract stopped at 6814.50, just short of the 50% level, before rebounding. The next indicator to overcome is the 50-day moving average at 6892.14. If buyers can push through this level, the index would turn higher for the year. If momentum increases on this move, then look for the rally to possibly extend into at least 6925.50.

More Information in our Economic Calendar.