In a significant market-triggering move, U.S. stock futures showed gains Wednesday night after President Donald Trump announced a withdrawal from the planned 10% tariffs on the European Union. This decision came in the context of a "very productive" discussion with NATO Secretary General Mark Rutte during the World Economic Forum in Davos, centered on forging a "framework of a future deal" regarding Greenland.
This tariff retreat subsequently propelled the resurgence of the so-called “TACO Trade,” a trading theme linked to tariff and trade policy developments. Market data as of late Wednesday indicated the S&P 500 futures rose by 0.30%, equivalent to 21 points, reaching a level of 6,931.00. Meanwhile, Nasdaq futures gained 0.43%, or 108 points, positioning at 25,579.00. The Dow futures also demonstrated improvement, climbing 88 points or 0.18%, to trade at 49,353.00.
Concurrent with these U.S. moves, Asian markets exhibited pronounced upward momentum. Japan's benchmark Nikkei 225 index advanced 1.20%, an increase of 635 points, settling at 53,409.16. This rally was notably driven by stocks with exposure to European markets, reflecting positive sentiment stirred by the tariff developments.
Japan’s export figures underpin this optimism, as official Trade Statistics reports showed a 5.1% year-over-year increase in exports for December. This marks the fourth consecutive month of export expansion. Despite an 11.1% drop in shipments to the United States from the previous year, stronger overseas demand from other regions, coupled with depreciation in the yen against foreign currencies, have contributed to overall export strength.
In the commodity sphere, leading precious metals experienced price declines on the day. Gold traded at $4,806 per ounce, down 0.52%, while silver prices fell 0.81% to $92.355 per ounce.
The U.S. Dollar Index (DXY), which tracks the dollar’s value against a basket of major currencies, remained largely unchanged in the short term, trading at 98.787. This represented a minute decline of 0.01% for the day. However, over the preceding month, the index had increased by 0.86%, despite lingering concerns regarding the autonomy of the Federal Reserve.
Investor focus is shifting toward forthcoming corporate earnings and economic indicators. Anticipated earnings reports are scheduled from major U.S. companies, including Procter & Gamble Company (NYSE:PG), General Electric Company (NYSE:GE), Intel Corporation (NASDAQ:INTC), and Capital One Financial Corporation (NYSE:COF). Moreover, forthcoming U.S. economic data releases will include Gross Domestic Product (GDP) figures, Initial Jobless Claims, and Personal Consumption Expenditure statistics.