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European markets surged on Thursday after U.S. President Donald Trump said he would not proceed with tariffs on European countries over Greenland and announced a framework agreement on the future of the Danish territory.
By 08:05 GMT, Germany’s DAX jumped 1.2%, France’s CAC 40 climbed 1.3%, and the U.K.’s FTSE 100 advanced 0.7%, as investors welcomed a sharp de-escalation in transatlantic tensions.
Speaking at the World Economic Forum in Davos on Wednesday, Trump ruled out the use of military force and confirmed in a social media post that the tariffs he had threatened to impose from February 1 would not go ahead. He added that he and NATO Secretary General Mark Rutte had “formed the framework of a future deal with respect to Greenland and, in fact, the entire Arctic Region.”
Markets had opened the week under heavy pressure after Trump warned of escalating duties on several European nations unless the United States was allowed to acquire Greenland, an autonomous territory of Denmark. The sudden reversal eased fears of a renewed trade war and restored some confidence in regional equities.
Still, uncertainty lingers over the future of the U.S.-EU alliance. European Central Bank President Christine Lagarde underscored the changing global order on Wednesday, saying Europe needs a “deep review” to face “the dawn of a new international order.” Her decision to walk out of a dinner during remarks by U.S. Commerce Secretary Howard Lutnick highlighted lingering unease among European officials.
With little major data due in Europe on Thursday, attention turns to the United States. Investors are watching weekly jobless claims, updated GDP figures, and especially core PCE inflation for November, the Federal Reserve’s preferred measure of price pressures, for clues on the path of U.S. interest rates.
In corporate news, Associated British Foods confirmed that underlying sales at its Primark chain fell over the Christmas period, in line with its recent profit warning. Spain’s Bankinter reported a 14.4% rise in annual profit to a record €1.09 billion, supported by strong fee income. Swiss healthcare firm Galenica said 2025 sales rose 5.5% to a record high and reaffirmed its earnings outlook.
