Stocks rise as Trump backs away from tariff threats

Asian markets climbed on Thursday, tracking a strong rally on Wall Street after US President Donald Trump cooled his threat to impose tariffs on major European economies, easing fears of a fresh global trade conflict.

Investor sentiment was further boosted by renewed enthusiasm for artificial intelligence after Nvidia’s chief said the sector would require trillions of dollars in new investment.

Markets had been rattled earlier in the week when Trump warned he could slap tariffs on countries including Germany, France, Britain and Denmark, citing their opposition to a proposed US takeover of Greenland. The comments triggered warnings of retaliation, with French President Emmanuel Macron suggesting Europe could deploy a powerful, rarely used tool to counter economic coercion, raising the spectre of a trade war.

Relief came on Wednesday when Trump told the World Economic Forum in Davos that he would not take Greenland by force, before later announcing he had withdrawn the tariff threat altogether. In a post on Truth Social, he said a framework had been formed for a future deal covering Greenland and the wider Arctic region, adding that tariffs scheduled for February 1 would no longer go ahead.

The shift in tone sparked a rally of more than one percent in US stocks, reversing sharp losses seen earlier in the week. Asian markets followed suit, with gains across Tokyo, Hong Kong, Shanghai, Sydney, Seoul, Singapore, Taipei and Manila.

Safe-haven assets moved in the opposite direction. Gold and silver, which had hit multiple record highs amid recent uncertainty, fell on Wednesday and extended their declines during Asian trading.

Stephen Innes of SPI Asset Management said markets welcomed the de-escalation after days of anxiety. He noted that while some ambiguity remained, there was enough reassurance to calm investors, likening the shift to markets moving from pricing an immediate crisis to a risk that could materialise later.

Analysts also pointed to renewed confidence in the so-called “Trump put”, the belief that significant stock market declines would prompt the president to soften his stance.

Technology-heavy markets led gains in Asia, with Tokyo, Taipei and Seoul outperforming. South Korea’s main index topped 5,000 points for the first time, driven by strong advances in chipmakers.

The rally followed comments from Nvidia chief executive Jensen Huang at the WEF, where he said the development and operation of generative AI would require massive spending on infrastructure. He described the AI boom as the largest infrastructure buildout in human history, with trillions of dollars still needed across energy, cloud computing and electronics.

Shares in South Korean chipmakers Samsung Electronics and SK hynix rose more than three percent, while Japan’s SoftBank surged over seven percent. Chip equipment makers Advantest and Tokyo Electron also posted solid gains, and precision tools maker Disco Corporation jumped 17 percent after reporting stronger-than-expected earnings. In Taiwan, TSMC gained more than one percent.

At around 0230 GMT, Japan’s Nikkei 225 was up 1.9 percent, Hong Kong’s Hang Seng Index rose 0.2 percent, and Shanghai’s Composite Index gained 0.2 percent. The euro and pound edged higher against the dollar, while oil prices posted modest gains. In the previous session, the Dow Jones Industrial Average climbed 1.2 percent, and London’s FTSE 100 closed slightly higher.