US OPEN: Trump pivot lifts Wall Street sentiment

Wall Street futures pointed to a continued mid-week slump this morning, but sentiment shifted as Donald Trump took the stage at the World Economic Forum. Adopting a notably more defensive posture, the President’s assurance that a "forceful solution" regarding Greenland is off the table provided immediate relief to global markets. Crucially, the absence of any mention of Greenland-related tariffs has reignited the "TACO" (Trump Always Chickens Out) narrative among traders. Key takeaways from the President's address include:

• The American Engine: Trump described the US as the "engine of the planet," arguing that global prosperity is tethered to American growth. He touted his administration’s record on deregulation, tax cuts, and taming inflation.

• European Criticism: The President took aim at European energy and migration policies, contrasting them with his "America First" agenda.

• Trade Pressure: In a move consistent with his protectionist stance, Trump proposed 30% tariffs on Switzerland to combat the widening trade deficit.

• The Greenland Question: Trump reiterated his desire to negotiate the acquisition of Greenland, asserting that "no country other than the US" should hold the territory. He issued a stark ultimatum to Denmark: "If they say yes, it will be welcomed; if they say no, it will be remembered forever."

• Energy Strategy: While praising nuclear power and US dominance in oil and gas, Trump remained critical of renewables, specifically wind energy. He pledged to lower commodity prices and broker a resolution to the conflict in Ukraine.

• Regional Investment: The President also signaled that Venezuela stands to benefit from increased American investment.

Technical View: US500 (S&P 500 Futures)

S&P 500 contracts have staged a robust recovery, trading near the 6,900 level and reclaiming approximately 0.7% following yesterday's sell-off. The current corrective phase matches the magnitude of the December pullback. Bulls are likely eyeing resistance at 6,930, which aligns with the 50.0 retracement of the current correction and the weekend opening gap. Conversely, should the downward trend resume, sellers will look toward the 50.0 and 61.8 retracement levels of the major rally that began in November.

Corporate News

• Netflix (NFLX.US) shares fell just over 2.5% in early trading, a significant recovery from the nearly 8% drop seen in the pre-market. While Q4 results met expectations, the streaming giant’s forward guidance underwhelmed investors. In a strategic shift, Netflix announced it is moving to an all-cash offer for Warner Bros to finalize the merger. Consequently, the company has suspended its share buyback program to preserve capital for the acquisition.
• Johnson & Johnson (JNJ.US) reported Q4 2025 revenue of $24.6bn, slightly ahead of the $24.1bn consensus. Earnings per share (EPS) landed at $2.46, largely in line with estimates. While markets reacted positively to growth in the oncology portfolio and a stable 2026 outlook, the stock was trading down nearly 2% in the session.
• Charles Schwab (SCHW.US) delivered results that met analyst projections, with revenue at $6.34bn and EPS at $1.39. An initial negative reaction to the lack of an earnings beat was offset by the broader market rally, with shares currently up just under 1%.
• Travelers (TRV.US) posted a significant earnings beat, reporting EPS of $11.13 against an expected $8.74. Revenue reached $12.43bn, surpassing the $11.04bn forecast. Shares surged to $275 at the open before moderating to $270, maintaining a 1% gain.
• Halliburton (HAL.US) outperformed expectations with an EPS of $0.69 (vs. $0.54 expected) and revenue of $5.7bn. The oilfield services firm’s focus on new investment opportunities, including potential ventures in Venezuela, pushed shares up by more than 3%.