Liftoff. Greenland giveth and Greenland taketh away. A day after stocks fell sharply on worries about international strife tied to the Danish territory, they rallied Wednesday amid notes of de-escalation.

President Donald Trump arrived at the World Economic Forum in Davos-Klosters, Switzerland on Wednesday with a softer approach in his bid to take control of Greenland.

Trump told the crowd that he ‘won’t use force’ to take Greenland, a vow that calmed investors’ jitters and provided markets with a much-needed boost. Later in the day, he said he had reached a framework on a deal with NATO, erasing the threat of additional U.S. tariffs on goods from eight European countries.

My colleague Joe Light reported that Trump said Wednesday that the U.S. would be “unstoppable” if he used military might to acquire Greenland. “I don’t have to use force,” Trump said. “I don’t want to use force. I won’t use force. All the United States is asking for is a place called Greenland.”

The S&P 500 and Nasdaq Composite each ended the day up 1.2%. The Dow Jones Industrial Average rose 589 points, also 1.2%. It was a marked rebound from yesterday’s dismal performance—and the first time all three indexes rose by more than 1% on the same day since Oct. 20.

The Hot Stock: Moderna +15.8%
The Biggest Loser: AppLovin -5.8%

Best Sector: Energy +2.4%
Worst Sector: Utilities +0.2%

The Supreme Court heard arguments this morning in a case that could reshape the course of monetary policy and test Federal Reserve independence.

The dispute, Trump v. Cook, is set to decide whether a district court correctly ruled to block President Trump from immediately firing Lisa Cook from the Fed’s Board of Governors.

Cook launched her legal battle last August after she was terminated by Trump over allegations that she made false claims on mortgage documents in 2021 that may have secured her more favorable loan terms. Trump cited that alleged mortgage fraud as cause for dismissal in an August letter.

Cook and her legal team have argued that her termination without notice—or the ability to defend herself—trampled on her right to due process. Trump’s legal team has contended that the president didn’t have to wait for Cook to be found guilty to move forward with her removal.

Paul Clement, the attorney representing Cook in front of the Court on Wednesday, said that the Federal Reserve is a “uniquely structured entity with a distinct historical tradition.” The Trump administration’s stance, he said, would basically reduce the Fed to “at-will employment,” without the political cover intended by Congress.

During oral arguments, the justices seemed to lean toward rejecting the Trump administration’s argument. And none of the Justices seemed particularly thrilled that so much of the case hinged on social media posts.

As my colleague Nicole Goodkind reported from the Supreme Court press room, several key swing justices appeared skeptical of the government’s arguments. Chief Justice John Roberts, as well as others, questioned whether inadvertent errors in mortgage paperwork could plausibly rise to the level of gross negligence.

Nicole noted that the case has broad consequences for the future of the Fed, something the justices appeared to be keeping top-of-mind:

It may still be another few months before we get a ruling on the case. In the interim, the Fed is set to hold its policy meeting next week, where officials are expected to keep interest rates steady—a move that is likely to draw more ire from the White House.

Abbott Laboratories, Alcoa, Capital One Financial, CSX, Freeport-McMoRan, GE Aerospace, Huntington Bancshares, Intel, Intuitive Surgical, McCormick, Northern Trust, and Procter & Gamble report earnings tomorrow.

The Bureau of Economic Analysis releases the personal consumption expenditures price index for October and November. The consensus estimate for November is for a 2.8% year-over-year increase in the PCE price index. The November core PCE, which excludes volatile food and energy prices, is also expected to rise 2.8%.

The BEA releases its final estimate of third-quarter gross-domestic-product growth. Expectations are for a seasonally adjusted annual growth rate of 4.3%, unchanged from the BEA’s initial estimate released in late December.

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