Global stock markets has rallied this week as investors welcomed U.S. President Donald Trump’s withdrawal of planned tariffs tied to Greenland, a shift that eased recent geopolitical tensions and boosted risk sentiment worldwide.

European stocks, including the pan-European STOXX 600, climbed more than 1%, while London’s FTSE 100 regained much of its weekly losses as banking and real-estate shares advanced.

Wall Street futures also turned positive, reflecting improved investor confidence following the tariff retreat announced at the World Economic Forum in Davos.

In Asia, major bourses responded positively to the news, with markets in Tokyo and Seoul posting gains as investors reassessed risk-off positions taken earlier in the week.

The MSCI Asia-Pacific index ticked higher after several sessions of volatility tied to tariff jitters and safe-haven demand in precious metals.

Market participants highlighted how quickly sentiment turned once the Greenland tariff threat was eased, illustrating the sensitivity of global capital flows to headline risk.

Emerging markets also bounced back, with several equity and currency benchmarks recovering ground lost during earlier geopolitical stress.

Investors noted that economic fundamentals in many emerging economies remain solid despite external volatility, encouraging renewed interest in regional assets.

However, some strategists cautioned that geopolitical noise could still re-emerge, keeping a floor under safe-haven demand.

Commodities markets reacted to the improved sentiment, with oil prices posting modest gains after recent slippage, though they remained sensitive to broader supply-demand outlooks and macro indicators.

Brent crude held near previous trading ranges as producers and traders weighed conflicting signals from energy demand forecasts and stock builds.

Looking ahead, markets will focus on upcoming U.S. inflation data, consumer spending figures and key earnings reports, which could influence central bank policy outlooks and validate the recent rebound in investor confidence.

Continued resolution of geopolitical issues and clarity on trade policy will also be critical for supporting sustained market strength.

Source: Reuters.