U.S. stocks rose on Thursday after Trump backpedalled from threatened tariffs on European allies tied to negotiations over Greenland, easing fears of an escalating trade dispute that had rattled markets earlier in the week.
The Nasdaq Composite led gains, rising about 1%, while the Dow Jones Industrial Average advanced nearly 1%. The S&P 500 added roughly 0.5%, extending Wednesday’s rebound as investors rotated back into risk assets following several volatile sessions.
Market Movers:
- Alibaba (BABA) +7%: Shares jumped after reports that the company is preparing its AI chip unit, T-Head, for a potential IPO. Investors welcomed the move as a way to unlock value and position Alibaba as a stronger competitor in the AI accelerator market.
- Datadog (DDOG) +6%: The stock rose after Stifel upgraded the company to Buy, citing accelerating core growth and improving visibility into 2026 revenue. Analysts said Datadog’s valuation remains attractive relative to its growth outlook.
- Karman Holdings (KRMN) +5%: Shares climbed after the defense technology firm raised its full-year 2025 outlook and issued strong 2026 guidance. Management pointed to recent acquisitions as immediately accretive and a catalyst for expanding exposure to priority U.S. Navy programs.
- Abbott (ABT) -8%: Shares tumbled after the company reported fourth-quarter revenue that missed expectations, driven by weakness in its Nutrition business. Guidance for 2026 also came in slightly below consensus, overshadowing strength in MedTech and Pharma segments.
- Celestica (CLS) -8%: The stock fell following reports that Google expanded TPU server assembly to additional suppliers, reducing Celestica’s share of the work. The development raised concerns about customer concentration and near-term revenue pressure.
- T1 Energy (TE) -4%: Shares declined after short seller Culper Research disclosed a bearish position and the company filed a prospectus allowing the resale of shares by existing investors. The filing added to supply concerns despite no immediate requirement to sell.
- Axogen (AXGN) -2%: The stock slipped after the company announced plans for an $85 million equity offering. Proceeds will be used to repay debt and support general corporate purposes, but dilution weighed on shares.
Trade Tensions Ease, but Greenland Dispute Lingers
Markets found relief after Trump paused planned tariffs on eight NATO members, reducing immediate fears of a full-blown trade clash with Europe. Still, uncertainty remains as negotiations over Greenland’s future continue, with European leaders signaling firm opposition to U.S. control. Investors remain wary that trade rhetoric could resurface quickly, keeping geopolitical risk firmly in focus.
Earnings and AI Themes Support Risk Appetite
Optimism around AI spending continued to support tech stocks, with investors looking ahead to earnings from major semiconductor and software companies. Intel’s upcoming results are expected to be closely watched for signals on its turnaround and exposure to AI infrastructure demand. Elsewhere, strong earnings momentum across select sectors has helped offset lingering macro uncertainty, reinforcing confidence that corporate profits can withstand policy volatility.
Inflation Data Keeps Fed Expectations Steady
A shutdown-delayed reading of the Fed’s preferred inflation gauge showed price pressures holding steady, reinforcing expectations that the central bank will keep interest rates unchanged at its next meeting. Jobless claims data also pointed to a resilient labor market, offering further support to equities. Markets continue to price in a steady policy stance, with little expectation of a near-term rate cut.
Looking Ahead
Investors will turn their attention to the next wave of earnings reports and any developments from the World Economic Forum, where geopolitical tensions remain front and center. Updates on trade negotiations and monetary policy signals could drive fresh volatility. With tariff fears temporarily easing and earnings season underway, markets may attempt to build on recent gains — though sentiment remains sensitive to political headlines and global risk events.