European Stocks Surge Higher After Trump Rows Back On Tariffs Threat

European stocks rose strongly Thursday after U.S. President Donald Trump said he will not proceed with the imposition of tariffs on European countries for Greenland, and that he had reached a framework deal on the Danish territory.

At 03:05 ET (08:05 GMT), the DAX index in Germany gained 1.2%, the CAC 40 in France soared 1.3% and the FTSE 100 in the U.K. rose 0.7%.

Trump rows back on tariffs threat

In remarks on Wednesday at the World Economic Forum in Davos, Switzerland, Trump ruled out using military force after weeks of refusing to do so, and in a social media post said he would no longer be imposing tariffs that he had threatened to put into effect on February 1.

The U.S. president 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" during talks at the Swiss resort.

Regional stock markets had dropped sharply at the start of the week after Trump threatened escalating tariffs on several European countries unless the U.S. is allowed to purchase Greenland, an autonomous Danish territory.

That said, the strength of the traditional alliance between the European Union and the U.S. is now very uncertain, as indicated by ECB President Christine Lagarde walking out of a dinner during a speech by U.S. Commerce Secretary Howard Lutnick on Wednesday.

The European economy needs a "deep review" to face "the dawn of a new international order", Lagarde said earlier Wednesday.

U.S. inflation data in spotlight

There is little in the way of major economic data on the European slate Thursday, but there are a number of important U.S. economic numbers for investors to focus on.

The weekly initial jobless claims release will provide hints about the strength of the labor market, while the latest iteration of third quarter gross domestic product should show economic strength.

However, the most widely-watched figure could well be core PCE inflation for November–the Federal Reserve's favorite gauge of price rises–as investors search for clues over the likely path of U.S. interest rates this year.

Primark sales fell during Xmas period

In the European corporate sector, Associated British Foods (LON:ABF) confirmed that underlying sales at its Primark clothing business declined over the Christmas trading period, in line with the estimates published alongside its profit warning earlier this month.

Bankinter (BME:BKT) reported a 14.4% rise in net profit to a record €1.09 billion in 2025, with the Spanish bank helped by robust growth in off-balance-sheet funds and fee income that offset a decline in net interest income amid falling interest rates.

Swiss healthcare company Galenica (SIX:GALE) said its 2025 sales rose 5.5% to the highest level in its history, with all business segments contributing to growth and the company confirming its EBIT guidance of a 10-12% increase for the year.

Huber + Suhner (SIX:HUBN) said its full-year order intake was up almost 14% from a year earlier, but the Swiss connectivity components maker added that net sales slipped 3.3% amid the strengthening Swiss franc.

Crude steady after U.S. stocks build

Oil prices traded in tight ranges Thursday as the threat of tariffs over Greenland eased, but a build in U.S. crude inventories weighed.

Brent futures dropped 0.3% to $65.02 a barrel and U.S. West Texas Intermediate crude futures fell 0.2% to $60.49 a barrel.

The American Petroleum Institute said U.S. crude inventories rose by just over 3 million barrels in the week ended Jan. 16, after jumping over 5 million barrels in the week before.

Gasoline stocks climbed by 6.21 million barrels, pointing to softer demand, while distillate inventories, which include diesel and heating oil, fell by 33,000 barrels.

The Energy Information Administration is due to reveal official U.S. crude stocks later in the session, a day later due to a U.S. federal holiday on Monday.

Source: Investing