Trading Day: Relief on Greenland Deal Hopes

U.S. Stocks Surge on Greenland Deal Hopes Amid Market Relief

Market Reactions to Greenland Deal

ORLANDO, Florida, Jan 21 (Reuters) - U.S. stocks jumped and Treasury yields fell on Wednesday after President Donald Trump said a framework of an agreement over Greenland had been reached, and that tariffs on several European countries scheduled for February 1 will no longer be imposed.

Key Market Moves

If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today.

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U.S.-European Relations

Today's Key Market Moves

* STOCKS: A patchy global rebound, but Wall Street leapson Trump's Greenland breakthrough. Brazil +3%, South Korea andChina up too, but Japan slides again and Europe ends mixed. * SECTORS/SHARES: All 11 sectors on the S&P 500 rise, ledby energy +2.4%. Six others rise 1% or more. Moderna +16%, Intel+12%. * FX: Dollar index recovers ground, USD gains most vssafe-haven CHF. Risk-on mood boosts emerging FX - CLP, BRL, KRWall up ~1%. Bitcoin rebounds, ends +1%. * BONDS: U.S. yields down as much as 5 bps at the longend, also helped by solid 20-year auction. Long-dated JGBsbounce back from Tuesday's selloff, yields fall as much as 17bps. * COMMODITIES/METALS: Big divergence in precious metals -gold nears $5,000/oz but pares gains, silver -3%. Oil +0.5%.

Wall Street's Response

Today's Talking Points

* U.S.-European transatlantic drift

Trump's Davos address was highly critical of Europe, but he said the U.S. would not use force to take Greenland from fellow NATO ally Denmark. In that sense, U.S.-Europe tensions cooled slightly, and an agreement on Greenland appears to have been reached.

But the U.S.-European alliance is at its lowest ebb in 80 years. In Davos, ECB President Christine Lagarde walked out of a dinner during a speech by U.S. Commerce Secretary Howard Lutnick, and U.S. Treasury Secretary Scott Bessent called Denmark "irrelevant". As Canada's Mark Carney noted in reference to the world at large, "We are in the midst of a rupture."

* Trump Fed firing hopes in the balance

The likelihood of Trump firing Fed Governor Lisa Cook seems to be diminishing, after U.S. Supreme Court justices on Wednesday signaled their skepticism that Cook should be dismissed while her legal challenge to mortgage fraud allegations plays out.

This is one of two fronts that have opened up in what many say is a battle over the central bank's independence, the other being the Trump administration's indictment of Fed Chair Jerome Powell. Long-term interest rates and risk premia could fall if the courts rule against Trump.

* Wall Street tries to rein in Trump

It's not just European leaders, NATO officials and Canada's Carney expressing varying degrees of exasperation with Trump in Davos. Wall Street executives are too.

JPMorgan Chase CEO Jamie Dimon said Trump's proposal to cap credit card interest rates would be an "economic disaster". Other executives are also skeptical of Trump's interventionist measures aimed at tackling the affordability crisis, and are in talks with the White House to try and soften the rough edges.

What could move markets tomorrow?

* World Economic Forum in Davos * Australia unemployment (December) * Japan trade (December) * South Korea GDP (Q4, advance) * Malaysia interest rate decision * U.S. Treasury sells $21 billion of 10-year TIPS at auction * U.S. weekly jobless claims * U.S. GDP (Q3, final) * U.S. PCE inflation (November) * U.S. earnings, including Procter & Gamble, Intel, GeneralElectric, Capital One, Freeport-McMoRan

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Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

(By Jamie McGeever; Editing by Nia Williams)