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Wall Street had a broad S&P 500 rebound on Wednesday after the market suffered its biggest sell-off since October. Traders responded after President Donald Trump signaled the US would not use excessive force to pursue Greenland.
Stocks rose while bond yields steadied and the dollar weakened. Meanwhile, gold surged to a fresh record as investors tracked geopolitical risk and policy headlines.
The S&P 500 rose 0.8% as of 10 a.m. New York time, while the NASDAQ 100 gained 0.8%. In addition, the Dow Jones Industrial Average advanced 0.7%, and the Russell 2000 climbed 1.2%, extending small-cap strength.
Global equities moved higher, with the MSCI World Index up 0.5%. However, Europe lagged, and the Stoxx Europe 600 stayed little changed.
Market breadth improved as more than 400 S&P 500 members advanced. Consequently, the index returned to positive territory for 2026 after the previous session’s cross-asset decline.
Trump spoke in Davos during day two of the World Economic Forum (WEF) 2026 and pushed for immediate talks on Greenland. He presented US control of the Danish territory as essential to collective security and said it would not threaten NATO.
A strategist at Annex Wealth Management said markets focused on what Trump did not repeat. However, he did not renew tariff threats against Europe, and he did not say the US would use force.
Before the speech, UK Prime Minister Keir Starmer accused Trump of pressuring the UK on security issues. Meanwhile, France postponed a Group of Seven finance meeting where tariffs had been expected to feature.
US government bonds stabilized after the prior session’s selloff, and yields held near recent levels. The 10-year Treasury yield stayed near 4.28%, while the 2-year yield slipped one basis point to 3.58%.
The Bloomberg Dollar Spot Index declined 0.2% as it continued to fall for several days to date. The euro retreated at $1.1724, while the pound increased 0.1% to $1.3454, with the yen ranging around 158.13 per US dollar.
Crypto markets were rather stagnant, with Bitcoin rising 0.4% to $89,733.48 and Ether declining 0.4% to $2,977.56. However, the trend was opposite in the commodity market, with spot gold appreciating 1.9% at $4,855.37 per ounce.
Quant hedge funds started 2026 under pressure as crowded US equity positioning reversed. Losses reached 2.8% over the first two weeks of 2026, based on estimates from a prime brokerage book.
Prime brokerage analysis tied the drawdown to three drivers. These included losses in crowded positions, short exposure to high-beta names, and adverse idiosyncratic moves.
The latest setback arrived amid higher volatility across global markets. Still, some analysts said Tuesday’s sharp risk-off shift may have eased strain as popular long holdings rose and heavily shorted names fell.
Looking ahead, traders will track whether calmer policy messaging supports risk assets or whether Greenland and tariff risks revive volatility. Markets will also watch if the equity rebound holds as investors reposition across stocks, bonds, and safe havens.
Netflix issued a cautious earnings outlook as it increased programming spending and worked to close a Warner Bros. Discovery deal.
United Airlines beat fourth-quarter estimates and projected a strong 2026, driven by premium domestic and international demand.
Johnson & Johnson topped fourth-quarter sales expectations and issued higher-than-expected 2026 guidance.
Berkshire Hathaway may sell some or all of its Kraft Heinz stake after the company outlined plans to split into two.
UnitedHealth said it plans to return profits from Affordable Care Act plans to customers in 2026 as Congress weighs tax credits.
NVIDIA CEO Jensen Huang said demand for skilled vocational workers is rising even as artificial intelligence reshapes job markets.
Charles Schwab reported a surge in average daily trading volume in the fourth quarter.
Ally Financial reported higher-than-anticipated provisions for credit losses to prepare for potential loan deterioration.
Overall, the session showed a cautious improvement in market sentiment as softer geopolitical rhetoric allowed stocks to rebound. However, continued buying in gold highlighted that investors remain wary of policy risks and broader economic uncertainty.
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