Market Relief Rally: S&P 500 Futures Surge as Greenland Tariff Threats Recede and GDP Data Looms

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Morning Market Snapshot – January 22, 2026

Wall Street is breathing a collective sigh of relief this morning. Equity futures are trading sharply higher following a dramatic reversal in geopolitical tensions. President Donald Trump has officially backed down from his recent threats to impose a 10% tariff on eight NATO allies over the Greenland acquisition dispute. This pivot effectively neutralized the “trade war” premium that had triggered the worst single-day selloff in three months just two days prior. As of 6:00 AM ET, S&P 500 e-mini futures have climbed approximately 0.60%, while the tech-heavy Nasdaq 100 leads the advance with a 0.87% gain.

Traders are now shifting their attention from the Arctic to the economy. A massive “data dump” is scheduled for 8:30 AM ET, featuring the final reading of third-quarter GDP and the Federal Reserve’s preferred inflation metric, the Core PCE index. Economists widely expect GDP to confirm a robust 4.3% growth rate. While strong growth is generally positive, a “hot” inflation reading alongside resilient consumer spending could complicate the Federal Reserve’s path toward future interest rate cuts.

In the bond market, the 10-year Treasury yield has stabilized around 4.25% after touching a multi-month high of 4.30% during the peak of the tariff scare. The Japanese government bond market, which saw a chaotic spike in yields earlier this week, has also found a floor, providing a calmer backdrop for global equities. Pre-market volume is concentrated in the semiconductor and mega-cap tech sectors, which are rebounding after being hammered during Tuesday’s volatility. Intel is particularly in focus as it prepares to report earnings after the closing bell today, acting as a crucial barometer for the AI-driven chip rally.

Pre-Market News Catalysts

Alibaba (BABA): Shares rose 5% in pre-market trading following reports from Bloomberg News that the Chinese e-commerce giant is preparing for a fresh listing of its logistics or cloud units, signaling a potential unlocking of shareholder value.
Intel (INTC): The chipmaker’s stock is up over 11% this morning. This surge follows multiple analyst upgrades and price target increases ahead of its highly anticipated fourth-quarter earnings report due after the close.
BioNTech (BNTX): The biotech firm saw its shares jump nearly 12% in early trading. Investor enthusiasm is being driven by positive trial data for its next-generation oncology pipeline, which has renewed confidence in its post-COVID growth strategy.
Procter & Gamble (PG): The consumer staple giant is trading slightly lower ahead of its earnings release. Analysts are expecting $1.87 in earnings per share, but concerns remain about the impact of higher raw material costs on margins.

The Day’s Debate (The Bull vs. Bear Case)

The Bull Case: Optimists argue that the market has just cleared its largest near-term hurdle. The removal of the Greenland tariff threat eliminates a significant “tail risk” that could have disrupted global supply chains. According to strategists at XTB and BMO, the U.S. economy’s underlying fundamentals remain exceptionally strong, as evidenced by the expected 4.3% GDP growth. Bulls point to the S&P 500’s resilience, which has maintained a series of higher highs and higher lows despite recent volatility. Furthermore, the stabilization of the Japanese bond market suggests that fears of a “carry trade” liquidation were overblown. With corporate earnings season showing a constructive setup and analysts actually raising estimates into year-end, many believe the path of least resistance for stocks remains upward. The “Magnificent Seven” stocks are showing signs of life at their recent lows, suggesting that buyers are eager to rotate back into growth leaders as the geopolitical noise fades.

The Bear Case: Pessimists caution that the market is far from out of the woods. While the Greenland situation has cooled, the “Greenland relief” may be a temporary distraction from structural issues. Analysts at SP Angel note that President Trump’s recent criticisms of the Federal Reserve and his dismissal of Governor Lisa Cook have heightened concerns about the U.S. central bank’s independence. This perceived political interference has driven gold to record highs near $4,900 per ounce, signaling a lack of confidence in the dollar’s long-term stability. Additionally, the “Bear Case” highlights the risk of a “good news is bad news” scenario for the economy. If today’s GDP and PCE data come in stronger than expected, it could force the Federal Reserve to keep interest rates elevated for much longer than the market currently prices in. High valuation multiples, such as GE Aerospace’s P/E ratio of 50, leave little room for error if earnings growth fails to meet the very high bar set by investors.

The Strategic Takeaway

The single most important factor for investors today is the transition from geopolitical headlines to hard economic data. While the reversal of tariff threats has restored a sense of calm, the 8:30 AM ET data releases will provide the real “reality check” for the current valuation of the S&P 500. Investors should watch the Core PCE reading with particular scrutiny. If inflation shows signs of re-accelerating, the pre-market gains could evaporate quickly as the market recalibrates its expectations for the Fed’s next move. Maintain a focus on quality and earnings visibility, especially as the semiconductor sector faces its next major test with Intel’s results this evening.

Upcoming Session Outlook with Directional Bias

The market is poised for a strong start as it recovers from the Greenland-driven selloff, but the afternoon session will likely be dictated by the nuances of the GDP and PCE reports.

Directional Bias: Moderately Bullish

Disclaimer: This article is for informational purposes only and does not constitute financial, investment, or legal advice. The information provided is a synthesis of publicly available data and expert analysis and should not be considered a recommendation to buy or sell any security. Investing in the stock market involves risk, including the possible loss of principal. Past performance is not indicative of future results. Readers should consult with a qualified financial advisor to determine an investment strategy that is suitable for their own personal financial situation and risk tolerance.