LONDON — European stocks finished higher on Thursday after U.S. President Donald Trump said a “framework” agreement had been reached over Greenland, and called off imposing escalating tariffs on a group of European countries.
The pan-European Stoxx 600 closed the session 1.1% higher, with most sectors and all major regional bourses in the green.
Global markets are rebounding after Trump announced Wednesday that he and NATO Secretary General Mark Rutte had agreed on a “framework of a future deal” involving Greenland. As a result of that negotiation, Trump said he would no longer impose higher tariffs on European allies.
Trump, who had addressed delegates at the World Economic Forum in Davos, Switzerland, described the framework as more of a “concept” in an interview with CNBC’s Joe Kernen, saying it would involve U.S.-European collaboration on a proposed Golden Dome missile defense system and access to mineral resources in Greenland.
When pressed for specifics, Trump said, “it’s a little bit complex, but we’ll explain it down the line.”
Danish Prime Minister Mette Frederiksen on Thursday welcomed Trump’s Greenland pivot and said that she is open to ‘Golden Dome’ talks.
“We can negotiate on everything political; security, investments, economy. But we cannot negotiate on our sovereignty. I have been informed that this has not been the case either,” Frederiksen said, according to a Google translation.
“The Kingdom of Denmark wishes to continue to engage in a constructive dialogue with allies on how we can strengthen security in the Arctic, including the US’s Golden Dome, provided that this is done with respect for our territorial integrity,” she added.
It will likely alleviate concerns among market watchers about the fate of NATO. The European Aerospace and Defense index was last seen trading flat.
Later, Ukraine President Volodymyr Zelenskyy criticized European leaders’ response to geopolitical threats, in his speech at the WEF in Davos.
Autos, pharma stocks
Autos and pharma were particularly exposed to tariffs, given their export levels to the U.S. Auto-linked stocks were 2.3% higher, paring some earlier gains, and healthcare rose 1.7%.
It’s unclear what will happen to the EU-U.S. trade deal after European lawmakers suspended the approval of the EU-U.S. trade agreement reached last year.
Speaking at the World Economic Forum in Davos, Switzerland, German Chancellor Friedrich Merz welcomed Trump’s change in stance on tariffs and Greenland, and urged his European counterparts not to “write off the transatlantic partnership.”
Gold, a safe-haven asset, surged to consecutive fresh highs amid the geopolitical uncertainty but cooled slightly on Thursday. U.S. gold futures for February delivery gained 1% to reach $4,883 per ounce, reversing an earlier dip, after hitting a record high last week. Spot gold added 0.9%.
The depreciation of the U.S. dollar has been a key talking point over the past year, and especially in recent weeks as investors wobbled on America. The dollar index, which measures the greenback against a basket of major rivals, was last seen 0.1% lower.
Dollar index
CNBC will be speaking to more CEOs and political leaders at the World Economic Forum on Thursday, ranging from the chief executives of Carlsberg, Merck, SAP, and Vestas, as well as Latvian President Edgars Rinkēvičs, Spanish Economy Minister Carlos Cuerpo, and Irish Taoiseach Michael Martin.
Elsewhere, Volkswagen‘s net cash flow rose around 20% year-on-year, according to a statement on the company’s preliminary results. Its share price ended 6.2% higher Thursday, though some of this may be driven by reaction to tariff news.
Shares of Ubisoft plunged as much as 35% on Thursday morning after the maker of the Assassin’s Creed games announced a major organizational shakeup, alongside plans to shut studios and axe six games. Its shares ended down 36.6%.
Rheinmetall, Europe’s largest defense company, fell 3.2% on Thursday. Speaking at the Handelsblatt security and defense conference in Berlin Thursday, CEO Armin Papperger said he anticipates international orders to reach 80 billion euros this year.
U.K. insurer Beazley on Thursday rejected a £7.7 billion takeover offer from rival Zurich Insurance. Beazley shares finished 0.9% lower, while Zurich ended just below the flatline.
Yields on 10-year gilts — widely seen as the benchmark for U.K. government debt — widened by more than 1 basis point to 4.471% following reports that Labour’s Greater Manchester mayor Andy Burnham could return as a member of parliament and potentially challenge Prime Minister Sir Kier Starmer for the party leadership. Burnham last year criticized the government for “being in hock to the bond markets.”
The British pound was last seen up 0.51% against the dollar at $1.3493.
— CNBC’s Sam Meredith contributed to this report.
