Wall Street cheers as Trump withdraws Greenland tariff threats, anticipates Supreme Court to block further tariffs

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The S&P 500 index rose 0.55% in the previous session, buoyed by positive U.S. GDP data and the withdrawal of President Trump’s threat to impose tariffs on Europe over Greenland. Following a sell-off earlier in the week, the index has climbed back above 6,900, trading within 1% of its record peak. Gold also reached a new high yesterday.

However, S&P 500 futures were down 0.24% before the New York market open, and European markets saw slight declines this morning after a mixed session in Asia, indicating traders are taking profits following the recent rally.

On the macroeconomic landscape, the sentiment among Wall Street analysts has turned optimistic, a significant shift from the anxious tone of recent days.

In fact, the economic impact of Trump’s tariffs has been far less severe than the “earlier worst-case fears” suggested. According to Dubravko Lakos-Bujas and his team, businesses have adapted their pricing and supply chains, leading to a “realized tariff rate” of approximately 11%, which is lower than the anticipated 15%. The analysis notes that “Only 14% of S&P 500 companies are highly sensitive to tariffs.”

The bank suggests the situation could improve further if the U.S. Supreme Court rules that the president does not have the authority to impose tariffs unilaterally.

“Prediction markets assign a greater than 65% probability that the Supreme Court will rule against the government, and these odds have consistently favored this outcome, particularly after the oral arguments in November,” Lakos-Bujas informed clients.

Source: Polymarket

Analysts also welcomed an upward revision to the U.S. GDP figure for the third quarter of last year, which now stands at 4.4%.

“The 4.4% real growth rate is significantly above the norm and is expected to slow during the year, but maintaining a rate above 3% for the full year could potentially generate double-digit stock market returns,” stated Chris Zaccarelli, chief investment officer at Northlight Asset Management, in an email reviewed by .

EY-Parthenon Chief Economist Gregory Daco expressed a similar view. “Momentum was fueled by sturdy consumer spending, strong investment in equipment and AI, a substantial contribution from net international trade, and a recovery in federal government spending. The U.S. economy is neither overheating nor stalling—it is adjusting,” he wrote in a note.

This collective data accounts for the current tranquility observed in the markets.

“For some assets, it was almost as if the sell-off never occurred, with the VIX volatility index (-1.26pts) returning to 15.64pts, a level lower than before Saturday’s tariff announcements,” according to Jim Reid and his team at .

Here’s a snapshot of the markets ahead of the opening bell in New York this morning:

  • S&P 500 futures were down 0.24% this morning. The last session closed up 0.55%.
  • STOXX Europe 600 was down 0.22% in early trading.
  • The U.K.’s FTSE 100 was down 0.11% in early trading.
  • Japan’s Nikkei 225 was up 0.29%.
  • China’s CSI 300 was down 0.55%.
  • The South Korea KOSPI was up 0.76%.
  • India’s NIFTY 50 was down 0.95%.
  • Bitcoin was flat at $89.9K.