Trump cancels the Greenland tariffs: Says they’ve the framework of a future deal

Stock futures are ripping higher and at the session highs after this post from Trump:

Based upon a very productive meeting that I have had with the Secretary
General of NATO, Mark Rutte, we have formed the framework of a future
deal with respect to Greenland and, in fact, the entire Arctic Region.
This solution, if consummated, will be a great one for the United States
of America, and all NATO Nations. Based upon this understanding, I will
not be imposing the Tariffs that were scheduled to go into effect on
February 1st. Additional discussions are being held concerning The
Golden Dome as it pertains to Greenland. Further information will be
made available as discussions progress. Vice President JD Vance,
Secretary of State Marco Rubio, Special Envoy Steve Witkoff, and various
others, as needed, will be responsible for the negotiations — They will
report directly to me. Thank you for your attention to this matter!

The S&P 500 is up 1.3%.

The market initially sniffed this out earlier today after Trump ruled out military action in Greenland. His stated case at Davos also made little sense, as the US is already allowed to build and operate military facilities for defense on the island.

Notable here is that there is a broader endorsement of NATO and some type of joint arctic defense. That’s a good sign for the continued existence of NATO and the trans-Atlantic alliance. It will also throttle back some of the worries about a schism between the US and Europe. Indeed, the US dollar is improving moderately on the headlines.

In the aftermath, gold prices are falling and back to flat on the session.

This move is a reminder that oftentimes, Trump’s bombastic rhetoric shouldn’t be taken seriously. The abduction of Venezuelan President Nicolas Maduro heightened fears about an unhinged military conquest but this gets back to the old playbook of fading Trump’s most-outrageous talk.

At the same time, there’s no one in markets or anywhere else that I’ve seen predict Trump with any accuracy over time, so we’re all just along for the ride. What’s critical — as I wrote about earlier — is that Trump today emphasized his north star in office: the Dow Jones Industrial Average. He measures himself and his administration against it and that’s a disciplining mechanism.

Update:

Trump is now talking more about the deal and says the framework is ‘everything we wanted’ and a deal that everyone is happy with. Denmark’s foreign minister said the day is ending better than it started.