US stocks rebounded on Wednesday after President Donald Trump told the World Economic Forum that he would not use military force to acquire Greenland.
The speech eased a major geopolitical concern that had rattled global markets and triggered a sharp “sell America” trade a day earlier.
The Dow Jones Industrial Average rose 141 points, or 0.3%.
The S&P 500 gained 0.4%, while the Nasdaq Composite advanced 0.3%, as investors welcomed signs of de-escalation following one of the most volatile sessions of the year.
Trump’s Davos comments calm markets
Trump delivered the remarks during a speech in Davos, Switzerland, where he addressed world leaders and business executives on issues ranging from NATO burden-sharing to US trade policy.
His comments on Greenland were closely watched after markets sold off sharply on Tuesday amid fears that the standoff could escalate.
“We never asked for anything, and we never got anything. We probably won’t get anything unless I decide to use excessive strength and force, where we would be, frankly, unstoppable. But I won’t do that. Okay? Now everyone’s saying, ‘Oh, good.’ That’s probably the biggest statement I made, because people thought I would use force. I don’t have to use force. I don’t want to use force. I won’t use force,” Trump said.
Those remarks marked the first time the president explicitly ruled out the use of military force in pursuit of the Danish-controlled territory, helping reverse some of the risk-off moves that had dominated markets.
Treasuries and dollar stabilise
Financial markets responded quickly. US Treasury prices rose, and yields moved lower, reversing part of Tuesday’s sharp spike.
The 10-year Treasury yield, which had surged and briefly topped 4.3% in the previous session, eased as demand returned to government bonds.
The US dollar index also pared its decline against major currencies, signalling a pause in the rapid diversification away from dollar-based assets that had unfolded during the prior session.
Stocks had suffered heavy losses on Tuesday after Trump escalated tariff threats against European countries and declined to rule out military action to secure Greenland.
All three major benchmarks logged their worst daily performances since Oct. 10, pushing the S&P 500 and Nasdaq Composite into negative territory for 2026.
That sell-off was accompanied by a surge in Treasury yields and a sharp drop in the dollar, as investors reduced exposure to U.S. assets.
‘Sell America’ trade under scrutiny
Market participants have increasingly focused on what some analysts describe as a re-emerging “sell America” narrative.
Joyce Chang, chair of global research at JPMorgan, said the trend had been building quietly.
“America First is quietly driving diversification away from dollar assets, especially among government entities,” Chang wrote in a note.
“While we have long argued that the dollar maintains its transactional FX dominance, ‘Sell America’ narratives of diversification away from dollar assets have reemerged quietly but persistently.”
Treasury Secretary Scott Bessent sought to downplay concerns on Wednesday, telling reporters in Davos that the Trump administration was “not concerned” about the previous day’s market turmoil.
Trade tensions still unresolved
Despite Trump’s reassurance on military force, uncertainty remains elevated.
The president said on Wednesday that he was still “seeking immediate negotiations to once again discuss the acquisition of Greenland by the United States,” keeping diplomatic tensions alive.
European leaders have pushed back forcefully. On Tuesday, European Commission President Ursula von der Leyen described Trump’s latest tariff proposals as a “mistake” that would plunge Europe and the US into “a dangerous downward spiral.”
“Our response will be unflinching, united and proportional,” she said, adding that the European Union stood in “full solidarity” with Greenland and Denmark.
French President Emmanuel Macron, also speaking at the WEF, said the EU could consider using its Anti-Coercion Instrument in response to new US tariffs.
That tool would restrict US businesses’ access to Europe’s single market, including limits on public procurement, trade in goods and services, and foreign direct investment.
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