ISTANBUL

US stocks closed higher midweek after President Donald Trump decided to drop his threat of imposing tariffs on several European countries that had refused to support his push to acquire Greenland after reaching a framework for a deal with NATO involving the territory and the broader Arctic region.

The Dow Jones Industrial Average was up 1.21%, or 588.64 points, closing Wednesday at 49,077.23.

The Nasdaq increased 1.18%, or 270.50 points, to 23,224.82, while the S&P 500 added 1.16%, or 78.76 points, to 6,875.62.

The Volatility Index (VIX), also known as the "fear index," fell 15.88% to 16.90.

Stock markets turned green after Trump said Wednesday that a framework for a deal involving Greenland and the broader Arctic region was established following his meeting with NATO Secretary General Mark Rutte in Davos, Switzerland.

"Based upon a very productive meeting that I have had with the Secretary General of NATO, Mark Rutte, we have formed the framework of a future deal with respect to Greenland and, in fact, the entire Arctic Region," Trump wrote on his Truth Social platform.

He did not provide details but said additional discussions are ongoing.

"Based upon this understanding, I will not be imposing the Tariffs that were scheduled to go into effect on February 1st," he added.

US Vice President JD Vance, Secretary of State Marco Rubio, Special Envoy Steve Witkoff and "various others" will be responsible for negotiations, he said.

Before that, the chair of the European Parliament’s trade committee, Bernd Lange, announced that the European Union has put work on its trade agreement with the US on hold.

"Now official: EU-US deal is on hold until further notice!" he wrote on the US social media company X’s platform.

Lange said the negotiating team decided to suspend the work of the European Parliament trade committee on the legal implementation of the Turnberry deal.

"Our sovereignty and territorial integrity are at stake. Business as usual impossible," he wrote, referring to tensions over Greenland and tariffs.

Trump also said Wednesday that he is nearing the end of a search to replace Federal Reserve Chair Jerome Powell and hinted he has his candidate in mind.

“I’d say we’re down to three, but we’re down to two. And I probably can tell you, we’re down to maybe one, in my mind," he told CNBC in Davos.

Earlier in the day, Trump said he plans to soon announce the new chair of the Fed as he continued to criticize Powell in his speech at the World Economic Forum in Davos.