Trump TACO trade roars as stocks recover half of yesterday’s loss after messages over ‘piece of ice’ from Davos

Market Overview - The U.S. stock market rebounded after President Trump announced a potential deal regarding Greenland and the cancellation of threatened tariffs on several European countries [1][2] - The S&P 500 increased by 1.2%, recovering over half of its previous day's 2.1% drop, while the Dow Jones Industrial Average rose by 588 points (1.2%) and the Nasdaq composite also climbed by 1.2% [2][8] Treasury and Currency Movements - Treasury yields eased, indicating reduced investor concerns, with the 10-year Treasury yield dropping to 4.25% from 4.30% [3][9] - The U.S. dollar regained some value against other currencies after a decline the previous day [3] Company Performance - Halliburton's stock rose by 4.1% following a stronger-than-expected quarterly profit [6] - United Airlines shares increased by 2.2% after reporting better-than-expected profits and indicating strong revenue momentum into 2026 [6] - Netflix's stock fell by 2.2% despite reporting a stronger profit than anticipated, as investors were concerned about slowing subscriber growth and a lower profit forecast [7] - Kraft Heinz shares dropped by 5.7% after Berkshire Hathaway indicated it might sell its stake in the company [7][8] Market Sentiment and Historical Context - Trump's acknowledgment of the stock market's previous decline due to his Greenland ambitions suggests a pattern where his threats lead to market volatility, followed by a recovery through subsequent deals [4][5] - The "TACO" acronym reflects the market's expectation that Trump may backtrack on aggressive financial threats if they provoke strong market reactions [5]