[New York Stock Exchange] Rises for Second Day on Greenland Tension Easing... Nasdaq Up 0.91%

Trump Negotiates "Unconditional Total Access" to Greenland
Framework for Future Agreement with NATO and Greenland... Tariffs on Europe Withdrawn
Q3 GDP and November Consumption Data Remain Strong... Labor Market Holds Steady
JP Morgan Rises

The three major indices of the U.S. stock market closed higher for the second consecutive day on January 22 (local time). Following the previous day’s easing of geopolitical tensions-driven by the U.S. withdrawal of tariffs against Europe and the exclusion of military options for the annexation of Greenland-robust economic indicators released on this day further supported investor sentiment and lifted the stock market.

A trader is working on the floor of the New York Stock Exchange (NYSE) in the United States. Photo by Reuters Yonhap News Agency

On the New York Stock Exchange, the blue-chip Dow Jones Industrial Average closed at 49,384.01, up 306.78 points (0.63%) from the previous trading day. The large-cap S&P 500 index rose 37.73 points (0.55%) to 6,913.35, while the tech-heavy Nasdaq index jumped 211.195 points (0.91%) to finish at 23,436.02.

By sector, major technology stocks all showed strong performance. Nvidia rose by 0.77%. Microsoft climbed 1.52%, while Apple and Meta, the parent company of Facebook, gained 0.28% and 5.66%, respectively. JP Morgan advanced 0.44% despite news that President Donald Trump had filed a lawsuit seeking at least $5 billion in damages against the company and its chairman and CEO Jamie Dimon. On this day, President Trump’s team filed the lawsuit, claiming that JP Morgan closed his account for political reasons after the January 6, 2021, storming of the U.S. Capitol by his supporters.

The previous day, the market surged as President Trump established a framework for agreement regarding NATO and the Greenland issue. He withdrew plans to impose tariffs on eight European countries, including Denmark, starting February 1, and also ruled out the use of force regarding Greenland. As a result, the so-called “Sell America” trend-simultaneous selling of U.S. stocks, bonds, and the dollar-also appeared to subside.

Additionally, in a Fox News interview on this day, President Trump stated that he is negotiating with Europe to secure “total access” to Greenland. He mentioned that the access would not be time-limited, suggesting that permanent access rights are under discussion.

Eric Parnell, Chief Market Strategist at Great Valley Advisor Group, told CNBC, “Statements from the White House are often part of a larger negotiation process, ultimately moving toward a specific outcome,” adding, “Most of the noise generated during the process often turns out to be buying opportunities over time.”

However, uncertainties remain. Danish Prime Minister Mette Frederiksen stated, “We can negotiate everything politically-security, investment, and the economy-but our sovereignty is not negotiable,” drawing a red line on territorial sovereignty. While some analysts suggest that President Trump’s mention of access rather than ownership of Greenland indicates a shift in the annexation plan, it cannot be ruled out that tensions between the U.S. and Europe could rise again during future negotiations.

Strong economic indicators also bolstered investor sentiment. On this day, the U.S. Bureau of Economic Analysis (BEA) announced that the country’s real gross domestic product (GDP) for the third quarter grew at an annualized rate of 4.4% from the previous quarter, according to preliminary figures. This is 0.1 percentage point higher than the earlier advance estimate of 4.3%, with strong exports and a decrease in corporate inventories supporting the growth rate.

In addition, real personal consumption, adjusted for inflation, increased by 0.3% from the previous month, a larger gain than in October last year (0.1%). Despite concerns about a slowing labor market and the burden of high prices, consumption has remained relatively robust, supporting the U.S. economy. The personal consumption expenditures (PCE) price index for November rose 2.8% year-on-year, up 0.1 percentage point from October’s 2.7%, matching market expectations. Initial jobless claims for the week of January 11-17 totaled 200,000, coming in below market expectations.

Despite concerns that the labor market may be slowing somewhat, there are continued signs that growth driven by consumption is being maintained. As a result, expectations are growing that the Federal Reserve will keep its benchmark interest rate unchanged at its next meeting. According to CME FedWatch, the current interest rate futures market is pricing in a 95% probability that the Fed will hold the federal funds rate at the current 3.5-3.75% range at the Federal Open Market Committee (FOMC) regular meeting on January 28.

Lale Akoner, economist at eToro, said, “U.S. consumers continue to support the economy,” and added, “Resilient consumption reduces the risk of a short-term recession and supports corporate revenues, especially in consumer-related sectors.” She continued, “However, steady demand means that interest rates are likely to remain high for an extended period.”

U.S. Treasury yields remained steady. The benchmark 10-year Treasury yield, a global bond market indicator, stood at 4.25%, unchanged from the previous session, while the 2-year yield, which is sensitive to monetary policy, rose by 1 basis point (1bp = 0.01 percentage point) to 3.61%.