US markets regain composure as Trump rules out force on Greenland
The US Supreme Court hearing on Fed governor Cook’s future started.
Some calm descended on Wall Street as stocks rose and the volatility index eased after US President Donald Trump ruled out using force in his quest to acquire Greenland, telling the World Economic Forum in Davos he’s seeking immediate talks, with his support for NATO in the future seen hanging in the balance.
Meanwhile, Trump’s push to oust Federal Reserve governor Lisa Cook over untested claims of mortgage fraud seemed to get short shrift with the Supreme Court judges hearing the case, with justices appearing sceptical of the White House’s arguments.
Earnings season continued on Wall Street as Netflix’s cash flow and outlook disappointed investors, even as its revenue and profit beat expectations, while Johnson & Johnson’s sales of drugs treating cancer and autoimmune conditions offset the hit from losing a patent, and United Airlines beat estimates, projecting strong domestic demand in the coming year.
Australian futures are pointing to a small gain for the S&P/ASX 200 index when trading opens across the Tasman, while Statistics New Zealand is due to release travel and migration data for November and consumer spending on credit and debit cards for December, putting retail and tourism stocks in view today.
Calm descends
Stocks on Wall Street unwound some of their sharp losses on Tuesday, with the S&P 500 up 0.4% in late trading and the volatility index falling 4.4% to 19.21 after US President Donald Trump dialled down some of his recent rhetoric in his quest to add Greenland to the world’s biggest economy, telling the World Economic Forum in Davos that he won’t use force to push the point.
Still, Trump said he wants to start immediate negotiations and suggested his European NATO partners take US support for granted.
Meanwhile, the European parliament suspended work on implementing the US-European Union trade deal as the bloc’s leaders mull over their response to Trump’s threat of imposing tariffs on eight nations for their opposition to his Greenland overtures.
“President Trump is again at the centre of market attention and his ruling out of force to acquire Greenland drove a bounce-back in global equity markets,” Bank of New Zealand senior markets strategist Jason Wong said in a note. “There has been less impact on bonds and currency markets, with modest reactions.”
The greenback remained weak after the 'Sell America’ sessions, with the kiwi touching a four-month high of 58.66 US cents, trading at 58.44 cents at 7am in Auckland from 58.33 cents yesterday.
Still rising
Gold, meanwhile, continued its surge, with futures up 1.2% at US$4,824 an ounce at 7am in Auckland.
European markets were more cautious in their response to Trump’s speech, with the UK’s FTSE 100 and France’s CAC 40 both gaining 0.1%, while Germany’s DAX 30 fell 0.6%.
Meanwhile, the White House’s arguments seeking to fire Federal Reserve governor Lisa Cook over untested claims of mortgage fraud were met with sceptical questioning from Supreme Court judges hearing the case.
Earnings season continued in the US, with Netflix declining as investors were left uneasy about its outlook and cash flow, following on from the streaming giant switching up its US$72 billion bid for Warner Bros Discovery’s studios and streaming arms to an all-cash offer.
Johnson & Johnson was also on the red side of the ledger, despite beating expectations as sales of cancer and autoimmune drugs more than offset the hit from losing the patent on its Stelara treatment for skin and gut conditions.
Carrier United Airlines advanced as its upbeat outlook for 2026 buoyed the sector, with Delta Air Lines also rallying, while Charles Schwab gained as a sharp jump in brokerage activity boosted its quarterly earnings.
The improvement in sentiment is poised to carry through to the antipodes, with Australian futures pointing to a 0.2% increase for the ASX200 when trading opens across the Tasman. New Zealand’s S&P/NZX 50 index was among the hardest hit o Wednesday, slumping 1.2% yesterday.
Locally, retailers will be in view ahead with Stats NZ’s December electronic card spending due for release, while travel and migration figures for November will be watched by the likes of tourism and travel companies such as Air New Zealand, Tourism Holdings and SkyCity Entertainment Group.
