Nothing gets Wall Street excited quite like tariffs that don't happen. Markets went decidedly risk-on Wednesday afternoon after President Donald Trump announced he's scrapping the 10% tariffs on European Union countries that were supposed to kick in February 1st.
The reason? Progress on what Trump described as a framework deal involving Greenland and the broader Arctic region with NATO leadership. In a Truth Social post, Trump said he'd held a "very productive" meeting with NATO Secretary General Mark Rutte that apparently changed the calculus.
"We have formed the framework of a future deal with respect to Greenland and, in fact, the entire Arctic Region," Trump wrote. "This solution, if consummated, will be a great one for the United States of America, and all NATO Nations."
The negotiations aren't over, according to Trump. He indicated that discussions will continue beyond Greenland, mentioning something called "The Golden Dome" in relation to the territory. Vice President JD Vance, Secretary of State Marco Rubio, Special Envoy Steve Witkoff, and others will apparently take the lead on hammering out the details.
The Rally That Followed
The market response was swift and broad-based. This wasn't just a handful of mega-cap tech names doing the heavy lifting. Participation spread across size categories and sectors, the kind of move that suggests genuine relief rather than algorithmic noise.
The Russell 2000 jumped 2.0% to 2,697.66, leading all major indices. Small-caps tend to be more sensitive to trade policy since many have less international diversification and thinner margins to absorb tariff-related costs. When that threat evaporates, they tend to move first and fastest.
The Nasdaq 100, tracked by the Invesco QQQ Trust (QQQ), gained 1.9%. Both the Dow Jones Industrial Average and the S&P 500 advanced 1.6%.
The Magnificent Seven stocks collectively added more than $400 billion in market capitalization. NVIDIA Corp. (NVDA), Alphabet Inc. (GOOG), Apple Inc. (AAPL), Tesla Inc. (TSLA), and Meta Platforms Inc. (META) led that charge.
Top Performers in the Final Hour
Looking at stocks with market caps above $50 billion during the last hour of trading, the strongest performers showed just how widespread the enthusiasm was:
The mix of names tells an interesting story. You've got infrastructure plays like GE Vernova and Vertiv, semiconductor and chip design companies like AMD and Arm, pharmaceutical giants like Novo Nordisk, and nuclear energy exposure through Cameco. When this many different sectors rally together, it's a sign that the market is breathing a collective sigh of relief rather than rotating into specific themes.
The question now is whether this framework Trump mentioned actually materializes into something concrete, or if we're just in another round of tariff theater. For now, though, traders are taking the win.
