The Davos Pivot: Trump’s Tariff U-Turn Sends Markets Into a Greenland Glow

A sudden geopolitical shift from President Trump has sent Wall Street back into rally mode, easing fears of a trade war.

While the chip sector exploded on AI optimism, big names like Netflix and Kraft Heinz were left out in the cold due to disappointing outlooks and major shareholder jitters.

If you had “Greenland framework deal” and NATO’s Mark Rutte as the primary catalysts for a triple-digit Dow rally on your 2026 bingo card, please come forward and collect your prize.

After a Tuesday that felt like a slow-motion car crash for tech, we woke up to a surprisingly diplomatic tone from the World Economic Forum that has investors exhaling for the first time in weeks.

The Art of the (Greenland) Deal

I’ve spent enough time tracking market sentiment to know that nothing scares investors quite like "excessive force" and "unilateral tariffs."

Thankfully, President Trump decided to play the role of the stabilizer in Davos. His announcement that he doesn't intend to use military might to acquire Greenland was the first domino to fall, leading to a visible relief rally across the board.

But the real meat for the bulls came via social media. The President’s move to scrap the February tariff hikes for several European countries - citing a new "framework" for a deal - is a massive pivot. It seems a chat with NATO Secretary-General Mark Rutte was all it took to move the needle.

As a result, the Dow Jones and the Nasdaq both clawed back 1.2% in a single session. Even the US Dollar took a backseat, slipping 0.3% against the Euro to 1.1686 as the "safety" trade unwound.

Silicon Valley on Steroids

If the macro news provided the floor, the chip sector provided the rocket fuel. It’s becoming increasingly clear that the AI-hausse isn’t just a trend; it’s an obsession.

I watched Nvidia (NVDA | +2.95%) continue its relentless climb, while AMD (AMD | +7.71%) absolutely tore the doors off as investors anticipate a future where everything from your fridge to your car needs a high-end processor.

The real jaw-dropper, however, was Intel (INTC | +11.72%). Jumping nearly 12% the day before an earnings report is the definition of "priced for perfection." Beating that kind of hype is a tall order, but the market clearly thinks they’ve found their second wind.

A Bitter Aftertaste for Streaming and Staples

It wasn’t all champagne and green candles, though. Some of our heavy hitters struggled to find any momentum. Netflix (NFLX | -2.18%) reported revenue that actually beat expectations, but as we’ve seen a dozen times before, the market only cares about what you’re doing for it tomorrow.

A disappointing outlook sent the stock sliding, proving that even the king of streaming isn't immune to "future-fear" gravity.

Then we have Kraft Heinz (KHC | -5.72%), which is currently the poster child for "bad news comes in pairs."

Not only is the company struggling with its own headwinds, but the news that Berkshire Hathaway might sell off nearly its entire stake is a massive vote of no confidence from the Oracle of Omaha. When Buffett looks for the exit, retail investors usually aren't far behind.

The "Catapult" and the Clouds

On the industrial side, I’m looking closely at United Airlines (UAL | +2.20%), which is forecasting a profitable ascent for the rest of 2026. They seem to be navigating the turbulence better than most.

Meanwhile, Johnson & Johnson (JNJ | -0.09%) CEO Joaquin Duato claimed the company is "shooting up like a catapult" thanks to its current pipeline. It’s a bold metaphor, though the stock’s flat finish suggests investors are waiting to see where the stone actually lands.

Lastly, Halliburton (HAL | +4.05%) managed to edge higher after posting a slight revenue beat in the fourth quarter. It's a solid showing for the energy services giant, though they remain vulnerable to the same geopolitical swings that are currently dictating the pace in Davos.

My take?

The "Trump Pivot" has given us some breathing room, but with Intel reporting tomorrow and the Greenland "framework" still in its infancy, keep your seatbelts buckled. We are trading on headlines, not just spreadsheets, and those headlines can change with a single post on Truth Social.

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Kristoff - ChartMill

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