Yesterday, US markets reversed most of the previous day’s losses that were driven by Greenland/tariff headlines. Equities rallied after the open after President Trump took the use of force off the table during his Davos address, then again in the middle of the day after Trump said a framework for a Greenland deal had been worked out after an apparently very efficient meeting with NATO Secretary-General Mark Rutte. The S&P 500 closed up just over 1% but small and mid-cap indices were up ~2% hitting new all-time highs. Equities are following through on yesterday’s late-day jump with broad participation. Small caps are up ~1% and the S&P just below that and at session highs.

Several sectors are up ~1% or more with Comm Services leading. Discretionary is also trading well, with Tesla up ~4% after Elon talked up the Optimus robots, and interstellar travel, at Davos this morning. Travel and Leisure are also mostly higher. Real Estate and Industrials are lagging but only modestly lower. GE is weighing on Industrials despite beating estimates.

Economic data today showed initial claims ticked up slightly from last week but came in better than expected at 200k. Continuing claims fell to 1.849ml. Q3 GDP was revised slightly higher. Headline and Core PCE was basically inline with estimates. The economy and labor market are holding up and inflation is under control but still elevated from the Fed’s 2% target. Flash PMIs will be released tomorrow.

There’s a bit of flattening in the treasury curve with the 2y currently up 3bp, 10y +1bp and 30y now 2bp lower. The US Dollar Index is giving back its gains from yesterday as it moves back toward 98.