US markets bounce back: Dow Jones, S&P500 and NASDAQ jump 1% as Trump cools off Greenland military action

The US markets rallied across the board on Wednesday after President Trump ruled out taking harsh action against Greenland. The Dow Jones, S&P500 and NASDAQ closed above 1%. While speaking at the World Economic Forum, President Donald Trump said he is not seeking military action on Greenland, which cooled investor sentiments and led to a sharp recovery from lower levels. Additionally, he also scaled back on imposing fresh tariffs on the European nations, which were likely to go into effect from February 1.

On the other hand, the bond yields also cooled off from higher levels in the US and Japan, giving a sigh of relief for investors across the globe. The US 10-year bond yield traded 4.25% after hitting a recent high of 4.305%. Similarly, the Japanese bond-market also cooled off as the 10-year treasuries crashed over 3.7% on Wednesday. Consequently, the Japanese markets are now up over 1.2% as the latest economic data indicated that Japanese exports hit a new record high level.

The US investors are now focusing towards the upcoming earnings by Procter & Gamble, GE Aerospace and Intel, among others. The Intel shares climbed over 12% in the after-hours trading session ahead of its quarterly earnings. The gains were also led by other technology shares, where AMD and Micron rose over 6% on Wednesday.

The dollar held steady on Wednesday as geopolitical tensions between the US and Greenland eased. The investors also look forward to the weekly jobless claims data for fresh signs of the labour market. Additionally, the next week’s Federal Reserve policy meeting will be closely watched after the Federal Reserve was served with a court notice by the Department of Justice in the previous week. The Federal Reserve is widely expected to keep the policy rates unchanged.

The gold prices also retreated from the record high levels after geopolitical tensions eased. The gold price fell by nearly 2% from the recent record high levels of $4,888 ounce. The Silver prices also fell to $92 per ounce from $95 level.