NEW YORK: Wall Street’s main indexes rose toward record highs on Thursday after President Donald Trump dialed back his threat of tariffs on European countries, while a new batch of economic data underscored a resilient US economy.
The gains follow the S&P 500’s biggest one-day percentage gain in two months on Wednesday when Trump stepped back from imposing tariffs as leverage to seize Greenland and said a deal was in sight to end a dispute over the Danish territory.
Trump’s tariff threats had sent shivers through global markets on Tuesday, though buyers quickly returned to stock markets following his U-turn.
Tech stocks were at the forefront of the rally, with Alphabet, Tesla and Apple all up nearly 1 percent, while Meta gained 3 percent.
The small-cap Russell 2000 index gained 1.3 percent to a record high.
“It’s the TACO trade follow on from yesterday,” said Dustin Thackeray, head of portfolio management at Crewe Advisors, referring to traders’ acronym for “Trump Always Chickens Out” - what some say is the US president’s tendency to ramp up threats only to later back down.
“There’s definitely a lot going on in the geopolitical realm, and I don’t think that’s going to slow down anytime soon, especially as it a midterm year,” said Thackeray.
The CBOE Volatility Index, also known as Wall Street’s fear gauge, slid to 15.52 points, moving further from a two-month peak touched on Tuesday.
At 11:27 a.m. ET, the Dow Jones Industrial Average rose 410.16 points, or 0.84 percent, to 49,487.39, the S&P 500 gained 47.41 points, or 0.69 percent, to 6,922.96 and the Nasdaq Composite gained 238.25 points, or 1.03 percent, to 23,463.07.
US consumer spending increased solidly in November and October, likely keeping the economy on track for a third straight quarter of strong growth, the personal consumption expenditures index showed.
Separate data showed initial claims for state unemployment benefits increased less than expected last week, while the US economy grew by a slightly more-than-expected 4.4 percent in the third quarter of 2025.
The data lands ahead of the US central bank’s rate decision next week, where it is widely expected to stand pat on interest rates amid still-sticky inflation and evidence of economic resilience.
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