Trump Retreats from Hardline Rhetoric, Calming Market Panic

U.S. stock markets continued their rebound as former President Trump's aggressive policy statements that had rattled markets in recent days were notably softened. On Thursday (local time), the Nasdaq Composite rose 0.91% to close at 23,436.02, while the S&P 500 gained 0.55% to 6,913.36 and the Dow Jones Industrial Average climbed 0.63% to 49,384.01.

Investor anxiety rapidly dissipated after threats of military action in Greenland and warnings of renewed tariffs on the UK and major European nations that had hammered markets on Monday failed to materialize into concrete actions. Eric Parnell, Chief Market Strategist at GreatValleyAdvisorGroup, told CNBC that "most statements coming out of the White House are part of the negotiation process, and they often turn out to be buying opportunities."

Tech Stocks Drive Broad-Based Rally

Technology stocks led the rebound. The Nasdaq Composite's 0.91% gain was the strongest among the three major indices, indicating renewed investor appetite for growth and innovation stocks. The S&P 500 added 37.74 points, while the Dow industrials rose 306.78 points.

Trading volumes were robust. Billions of shares changed hands across major U.S. exchanges, demonstrating solid demand for equities. The day's advance was characterized by sustained buying in growth-oriented sectors.

Currency Markets: Dollar Weakens as Commodity Currencies Surge

In foreign exchange markets, the U.S. dollar weakened against European and commodity-linked currencies. The euro rose 0.59% against the dollar to 1.1751, while the British pound gained 0.57% to 1.3500. These moves reflected improved risk appetite in European markets.

Commodity currencies posted even stronger gains. The Australian dollar surged 1.14% to 0.6838, while the New Zealand dollar jumped 1.12% to 0.5907. Stronger-than-expected commodity prices and rising equity markets boosted demand for risk-sensitive currencies.

The U.S. dollar edged up 0.08% against the Japanese yen to 158.36, maintaining levels near multi-decade highs, but fell 0.74% against the Swiss franc. Against the Canadian dollar, it declined 0.33% to 1.3786, reflecting the impact of rising oil prices.

Market Fundamentals Remain Solid

Strategist Parnell emphasized that "the fundamentals supporting the market remain robust." Monday's sharp decline triggered by Trump's statements is proving to have been an overreaction, as evidenced by two days of recovery. Major indices are approaching recent all-time highs, and investors will be looking for additional directional clues in Friday's trading.

[AI Analysis] Market Resilience Amid Political Uncertainty Noteworthy

This rebound has once again demonstrated U.S. equity markets' ability to absorb political noise. While former President Trump's unpredictable statements trigger short-term volatility, the market's sober assessment of actual policy implementation probabilities continues to function effectively.

The strong rally in commodity currencies suggests that expectations of global economic recovery and inflationary pressures are operating simultaneously. The 1%+ surge in the Australian and New Zealand dollars particularly reflects positive sentiment toward Asia-Pacific economies.

Two factors warrant close attention going forward. First, the Federal Reserve's interest rate policy direction. If dollar weakness persists, inflationary pressures could reemerge, potentially influencing the Fed's monetary policy decisions. Second, the sustainability of the tech-led rally. Confirmation is needed whether the Nasdaq's strength represents concentration in select stocks or broad-based fundamental improvement across the technology sector.

Investors will focus on Friday's trading and early next week's economic data releases to determine whether the current rebound is a short-term technical bounce or the beginning of a new uptrend.