Macro update
Wall Street rebounds:
United States (US) equities finished higher after President Trump said a framework agreement on Greenland had been reached and that proposed tariffs on European allies would be shelved, reversing Tuesday’s sharp selloff.
Strongest gains in weeks:
The Dow Jones advanced 1.21%, the S&P 500 rose 1.16% and the Nasdaq 100 gained 1.18%, with the S&P posting its largest one-day increase in two months.
Banks drive the rally:
Solid earnings from major and regional lenders lifted the regional bank index 4.7% to its highest level since November 2024.
Energy and airlines outperform:
All S&P 500 sectors closed higher, led by energy stocks, while United Airlines climbed after delivering an upbeat first-quarter and full-year outlook.
Safe-haven demand eases:
The VIX volatility index retreated, US Treasuries found support and gold fell roughly $100 from its record high as geopolitical risk premiums faded.
Global spillover:
European equity futures jumped more than 1%, Asian markets advanced, the euro slipped back below $1.17, and markets continued to price around 45bp of US rate cuts this year.
S&P 500 rallies once again
The S&P 500’s drop from last week’s 6986 high has taken it to Tuesday’s 6789 low amid US President Trump’s tariff threat on several European countries with it once again rallying now that he back-tracked on imposing tariffs.
The late December high at 6903 represents the next upside target, followed by its mid-January 6986 record high.
If support at 6789 were to give way, though, the mid-December low at 6721 would be back on the map.
Short-term outlook:
Bullish while above the 20 January 6789 low.
Medium-term outlook:
Bullish while above the 6721 mid-December low.