Financial markets rebounded after U.S. President Donald Trump softened his stance on proposed tariffs against the European Union following meetings at the World Economic Forum in Davos. The threat of a 25% tariff on European goods was removed after discussions involving NATO leadership and senior EU representatives.
Equity markets initially reacted with volatility, reversing early losses and closing higher as investors interpreted the development as a reduction in near-term trade risk. The shift eased concerns over renewed transatlantic trade tensions, which had weighed on sentiment in recent sessions.