Finance
European shares rebound as Trump withdraws tariff threats over Greenland
Published by Global Banking and Finance Review
Posted on January 22, 2026
2 min readLast updated: January 22, 2026
Quick Summary
European stocks surged as Trump withdrew Greenland tariff threats, boosting investor confidence. STOXX 600 rose 1.2% amid ongoing market volatility.
European Stocks Surge as Trump Drops Tariff Threats on Greenland
Market Reactions to Tariff Developments
By Niket Nishant
Impact on European Shares
Jan 22 (Reuters) - European shares rebounded on Thursday after U.S. President Donald Trump abandoned tariff threats linked to Greenland and ruled out using force to seize the autonomous Danish territory.
Investor Caution and Market Volatility
The pan-European STOXX 600 climbed 1.2% by 0905 GMT, regaining some poise after renewed trade war jitters knocked 1.9% off the benchmark earlier this week through Wednesday.
Company Performance Insights
Trump said he withdrew the tariff threat following a meeting with NATO Secretary General Mark Rutte, during which they reached the framework of a deal for Greenland's future.
While details were scant, Trump's comments were enough to boost the risk appetite among investors.
VOLATILITY SUBSIDES BUT RISKS PERSIST
A gauge of euro zone equity volatility fell 1.96 points, and is on track to dip for a second consecutive session after hitting its highest since November earlier this week.
Still, "the chaos is far from over and there'll be ongoing volatility in the markets because of the Trump administration's erratic foreign policy," said Kyle Rodda, senior financial market analyst at Capital.com.
Analysts also cautioned against complacency and urged investors to remain wary as tariff threats become an increasingly normalized negotiating tactic.
"The hidden risk is complacency. Investors get conditioned to ignore threats because 'it'll get walked back,' until the day it doesn't get walked back," said Matthew Tuttle, CEO of Tuttle Capital Management.
Traders are also combing through financial updates from companies for insight into profit outlook and underlying demand trends.
Shares of Volkswagen climbed 5.7% after Europe's largest carmaker reported better-than-expected net cash flow for 2025.
Swedish hygiene products maker Essity slipped 4.3% following fourth-quarter results, while UK insurer Beazley dropped 1% after it rejected a 7.67-billion-pound ($10.3 billion) takeover bid from Zurich Insurance.
Automobile and telecom stocks were the biggest gainers, up 2.8% and 2.1%, respectively.
Later on Thursday, investors will also look to U.S. core Personal Consumption Expenditures data for clues on interest rate trajectory.
(Reporting by Niket Nishant in Bengaluru; Editing by Sherry Jacob-Phillips and Shilpi Majumdar)
Key Takeaways
- •European shares rose as Trump withdrew tariff threats on Greenland.
- •STOXX 600 index increased by 1.2% following the announcement.
- •Market volatility decreased but risks remain due to foreign policy.
- •Volkswagen shares surged 5.7% with positive cash flow reports.
- •Investors await U.S. economic data for interest rate insights.
Frequently Asked Questions about European shares rebound as Trump withdraws tariff threats over Greenland
1What is equity?
Equity refers to the ownership value in an asset or business, often represented by shares in a company. It signifies the residual interest in the assets of a company after deducting liabilities.
2What is market volatility?
Market volatility refers to the degree of variation in trading prices over time. High volatility indicates significant price fluctuations, while low volatility suggests more stable prices.
3What is investment?
Investment is the act of allocating resources, usually money, in order to generate income or profit. It can involve purchasing assets like stocks, bonds, or real estate.
4What is economic growth?
Economic growth is an increase in the production of goods and services in an economy over a period of time, typically measured by the rise in Gross Domestic Product (GDP).
5What is insurance?
Insurance is a financial arrangement that provides protection against potential future losses or damages. It involves paying premiums in exchange for coverage against specific risks.
