Stocks’ Mild Rebound Fades as Traders Await Trump: Markets Wrap
(Bloomberg) — A tentative recovery in US stock futures lost steam as traders awaited President Donald Trump’s address at Davos to hear whether he would ratchet down days of tensions with Europe over Greenland.
S&P 500 contracts erased earlier gains of 0.4% after the US benchmark suffered its biggest drop in three months. Selling pressure initially eased after Trump struck a more conciliatory tone ahead of his departure for the World Economic Forum, even as he continued to insist the US should take control of the Danish territory.
A sharp rebound in long-dated Japanese bonds offered a lift to global debt markets, with the yield on 30-year US Treasuries holding steady as shorter-term rates eased. Precious metals remained the haven of choice as gold closed in on $4,900 an ounce. The dollar’s slide extended to a fourth day.
“Despite all the geopolitical noise, we’re in a purely technical correction in equity markets, not a widespread risk-off episode,” said Roberto Scholtes, head of strategy at Singular Bank. “Conciliatory remarks by Trump would surely improve the mood in markets but, in my view, wouldn’t trigger a strong rally unless yield curves come down.”
Trump is set to deliver his speech at the scheduled time of 2:30 p.m. in Davos, despite a delay in his flight due to a mechanical issue.
His threat of tariffs in pursuit of Greenland, and refusal to rule out military options, are giving the equity bull run its biggest test since the trade turmoil of April, even as investor optimism remains elevated amid a broadening rally.
While Trump earlier played down the likelihood that the standoff over Greenland would jeopardize his trade deal with the European Union, Treasury Secretary Scott Bessent kept up the administration’s offensive on Wednesday.
Speaking in Davos, Bessent said Deutsche Bank AG Chief Executive Officer Christian Sewing dismissed an analyst report from the lender that suggested European investors may dump US assets. He also cautioned European nations against ramping up their military presence in Greenland.
JPMorgan Asset Management’s Bob Michele said the selloff in markets was a message to the White House to restore calm.
“Things are a bit chaotic and the markets do feel a bit panicked,” Michele, chief investment officer and global head of fixed income, told Bloomberg TV. “The market had a fit in April and then they backed off of a lot of things and then calm ensued. We need to hear some of the same kinds of things.”
Investors will also follow arguments in the US Supreme Court over whether Trump can fire Federal Reserve Governor Lisa Cook. The hearing coincides with a Justice Department criminal investigation into Fed Chair Jerome Powell, together serving as tests of the central bank’s independence.
As the earnings season kicks into full swing, strategists said a sustained upswing in stocks will depend on strong forecasts and signs that capital investments in big tech are starting to pay off.
“We’ve overstretched in many different assets over the past two weeks, which meant that you’ve got to overbought territories and so you had to have a bit of a healthy correction,” said Georges Debbas, head of European equity and derivatives strategy at BNP Paribas.
A rally from current levels would require fiscal spending in Europe to translate into earnings upgrades, he said. In the US, firms need to ease investor concerns about the monetization of big tech spending.
“Without these two elements, it is difficult to see how the equity market, whether Europe or US, will sustain a very strong rally,” Debbas said.
What Bloomberg strategists say…
“The asset-price rebound after yesterday’s weakness has not exactly been overwhelming. Indeed, equity markets in Europe are generally in the red today, and if the Treasury market has bounced, that may have more to do with the rebound in JGBs than anything else. Today thus shapes up as an interesting litmus test of just how confident stock operators may be that this is just noise.”
— Cameron Crise, Macro Strategist, Markets Live. For the full analysis, click here.
Corporate News:
Netflix Inc.’s shares fell in premarket trading after warning of higher program spending and the cost of closing its deal with Warner Bros. Discovery Inc. Johnson & Johnson’s fourth-quarter sales beat expectations, led by strong growth for several newer cancer treatments, while issuing higher-than-expected 2026 guidance despite a recent deal with the White House to give discounts on some of the company’s key drugs. United Airlines Holdings Inc. rose after beating Wall Street estimates for the fourth quarter and said it anticipated a strong 2026. Berkshire Hathaway may soon sell some or all of its stake in Kraft Heinz Co., just months after the cheese and ketchup maker announced plans to split into two companies. Charles Schwab Corp. reported net revenue that missed analysts’ estimates in the fourth quarter as the brokerage failed to fully capitalize on a strong year for the stock market. Some of the main moves in markets:
Stocks
S&P 500 futures were little changed as of 8:20 a.m. New York time Nasdaq 100 futures fell 0.2% Futures on the Dow Jones Industrial Average fell 0.2% The Stoxx Europe 600 fell 0.8% The MSCI World Index fell 0.2% Currencies
The Bloomberg Dollar Spot Index fell 0.2% The euro was little changed at $1.1734 The British pound fell 0.2% to $1.3418 The Japanese yen rose 0.2% to 157.87 per dollar Cryptocurrencies
Bitcoin fell 0.7% to $88,743.42 Ether fell 1.9% to $2,932.86 Bonds
The yield on 10-year Treasuries declined one basis point to 4.28% Germany’s 10-year yield advanced one basis point to 2.87% Britain’s 10-year yield was little changed at 4.46% Commodities
West Texas Intermediate crude rose 0.4% to $60.61 a barrel Spot gold rose 2.2% to $4,867.32 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Sabrina Nelson Garcinuño.
©2026 Bloomberg L.P.
