Wall Street climbs again after Trump backdown, Australian dollar bounces, ASX set to rise
Stan Choe
The US stock market is on the rise again, clawing back most of its losses in the week following President Donald Trump’s latest backtracking on previously threatened tariffs.
The S&P 500 index rose 0.7 percent, extending its big gain since Wednesday as Trump said he had reached “the framework for a future agreement on Greenland” and canceled 10 percent tariffs on European countries he said opposed owning the Arctic island. The index has regained most of the losses it suffered after Trump shook financial markets with his first tariff threat.
The Dow Jones Industrial Average was up 408 points, or 0.8 percent, as of 11:30 a.m. Eastern time, and the Nasdaq composite was 1 percent higher.
The Australian share market is poised to rise, with futures pointing to a 10-point, or 0.1 per cent, rise at the open at 5am (AEDT). The ASX rose 0.8 per cent on Thursday following stronger-than-expected employment figures. The Australian dollar continued to strengthen and was trading at 68.40¢ at 5.15am AEDT.
Trump’s U-turn is the latest example of Trump initially issuing a major threat, only to back off after seeing how much pain it created in financial markets. This pattern gave rise to the acronym “TACO,” which stands for “Trump Is Always Afraid,” if markets reacted strongly enough. Tuesday’s drop in U.S. stocks was the worst since October and big enough for Trump, who has often praised Wall Street’s good run, to acknowledge the “dip.”
But this pattern has also led to deals for Trump that outsiders initially thought were unlikely, even without his initial extreme threat.
Details are still scant about the framework of the Greenland agreement that Trump says he reached with the NATO chief. And it’s not a signed agreement yet.
Financial markets were still showing some signs of uneasiness on Thursday. The gold price fluctuated between small losses and gains before rising 0.9 percent. Its price often rises as investors look for something safer to own. The value of the US dollar also declined against the euro and some other foreign currencies; but the decline was not as sharp as earlier in the week, when global investors bailed out of several US markets.
Treasury yields remained relatively stable in the bond market following encouraging reports on the strength of the U.S. economy. Fewer U.S. workers applied for unemployment benefits last week than economists expected, one said, a potential signal that the pace of layoffs remains low. Second, he suggested that the U.S. economy grew faster in the summer than the government initially predicted.
Third, he said inflation in November was close to economists’ expectations, while spending by U.S. consumers was slightly better than expected.
They helped keep the yield on the 10-year Treasury note at 4.26 percent late Wednesday.
On Wall Street, Northern Trust rose 5.6 percent after reporting stronger earnings for the end of 2025 than analysts expected. CEO Michael O’Grady also said the financial services company was heading into 2026 with “strong momentum across all our businesses.”
Procter & Gamble also gained 2.7 percent after posting a better profit than analysts expected. But revenue for the company behind the Downy, Pantene and Tide brands fell well below expectations in what CEO Shailesh Jejurikar called a “challenging consumer and geopolitical environment.”
Another winner was Generac, which sells electric generators. It rose 3.8 percent as forecasters warned a potentially devastating ice storm could hit large swaths of the United States.
They helped offset a 7.5 percent decline for spice retailer McCormick & Co., whose profits fell short of expectations. CEO Brendan Foley said it continues to face rising costs due to the “changing global trading environment.”
Shares of BitGo, which helps crypto businesses and traditional financial companies hold and manage digital assets, will begin trading on the New York Stock Exchange for the first time later in the day. The company priced its shares at $18 per share in its initial public offering; this was above the previously estimated range of $15 to $17.
In foreign exchanges, indices rose in Europe and Asia after Trump withdrew customs duties.
Japan’s Nikkei 225 index and France’s CAC 40 index rose 1.7 percent and 1.2 percent, recording the world’s two biggest gains.
Global markets also received support from the continued easing in long-term yields in the Japanese bond market. Concerns that Japan’s popular prime minister might make moves that would aggravate the government’s already large debt had risen at the beginning of the week.
But the 40-year Japanese government bond yield has eased since reaching a record, falling below 4 percent on Thursday after reaching 4.22 percent on Tuesday.
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