The major U.S. index futures are indicating a modestly lower open on Friday, suggesting that stocks are poised to retreat after experiencing significant gains in the preceding two sessions. Traders might seek to capitalize on the significant upward movement observed over the last two days, which has largely countered the sharp decline experienced on Tuesday. The rebound largely reflected a favorable response to President Donald Trump ruling out the use of military force to acquire Greenland and backing off tariff threats against Europe regarding his efforts to take control of the Arctic territory. However, Trump has now seemingly redirected his focus to Iran, informing reporters aboard Air Force One on Thursday that a U.S. “armada” is en route to the Middle East. “We’re watching Iran,” Trump stated. “You know we have a lot of ships going in that direction just in case. We have a significant flotilla heading in that direction, and we’ll see what unfolds.” Trump had earlier retreated from his threats of military action against Iran in response to its suppression of extensive protests.
Shares of Intel are expected to exert pressure on Wall Street, as the semiconductor giant has seen a significant drop of nearly 13 percent in pre-market trading. Intel faces mounting pressure following the release of its fourth quarter earnings, which surpassed expectations, yet the company offered disappointing guidance for the upcoming quarter. Stocks experienced a predominantly upward trajectory throughout the trading day on Thursday, building on the significant gains achieved during Wednesday’s session. The major averages have managed to counterbalance the significant losses recorded on Tuesday, with the Dow now showing a positive trend for the week. The major averages concluded the day significantly below their session highs, yet remained solidly in positive territory. The Dow increased by 306.78 points, or 0.6 percent, reaching 49,384.01. The Nasdaq saw an advance of 211.20 points, or 0.9 percent, climbing to 23,436.02. Meanwhile, the S&P 500 rose by 37.73 points, or 0.6 percent, to settle at 6,913.35.
The prolonged recovery on market occurred as stocks persisted in gaining from the alleviation of tensions surrounding President Donald Trump’s ambitions regarding Greenland. During a speech on Wednesday, Trump dismissed the possibility of using military force to acquire Greenland and subsequently stated that he had reached the “framework” of a deal regarding the arctic territory. Following the “framework” of a deal established with NATO Secretary General Mark Rutte, Trump retracted his threats to impose sanctions on European nations that opposed his plans. Some analysts interpret the current strength on market as a resurgence of the “TACO trade,” which stands for “Trump Always Chickens Out.” This phrase reflects the perception that the president frequently retreats after alarming the markets with potential new tariffs. “There are a lot of similarities with the Liberation Day market wobble in April 2025 and now,” said Russ Mould. In both situations, Trump adopted an aggressive approach and subsequently retreated after the financial markets showed signs of instability. He remarked, “The US president has a keen eye on what happens with bonds and stocks, and the last thing he wants is to be accused of destroying people’s wealth.”
In U.S. economic news, the Labor Department released a report on Thursday indicating a modest increase in first-time claims for U.S. unemployment benefits for the week ending January 17th. The report indicated that initial jobless claims rose to 200,000, reflecting an increase of 1,000 from the previous week’s revised figure of 199,000. Economists had anticipated an increase in jobless claims to 205,000, up from the initially reported 198,000 for the prior month. A separate report released by the Commerce Department indicated that consumer prices rose in accordance with economist estimates during the month of November. Gold stocks experienced significant strength throughout the day, driven by a notable rise in the price of the precious metal. The NYSE Arca Gold Bugs Index surged by 4.4 percent, reaching a record closing high. Notable strength was evident in telecom stocks, highlighted by the 2.1 percent increase in the NYSE Arca North American Telecom Index. The index achieved a record closing high. Software, networking, and biotechnology stocks exhibited significant strength, bolstering the rise of the tech-heavy Nasdaq, whereas real estate and housing stocks experienced a decline.