Wall Street cheers the conclusion of Trump’s Greenland tariff threats and anticipates that the Supreme Court will strike down additional measures.

Market Update: S&P 500 Rises Amid Positive Economic Signals

The S&P 500 advanced by 0.55% yesterday, buoyed by encouraging U.S. GDP figures and President Trump stepping back from his earlier threat to introduce additional tariffs on Europe over Greenland. After experiencing a decline earlier in the week, the index has rebounded above 6,900, now sitting less than 1% below its historic peak. Gold prices also reached a new high.

However, prior to the New York market opening, S&P 500 futures slipped by 0.24%. European markets saw modest declines this morning, while Asian markets ended with mixed results. This pattern suggests that investors are taking profits following the previous day's gains.

On the broader economic front, optimism is returning among Wall Street analysts, marking a notable shift from the uncertainty that dominated recent days.

Tariff Impact Less Severe Than Feared

According to JPMorgan Chase, the economic consequences of President Trump’s tariffs have been less significant than initially anticipated. Companies have adapted their pricing strategies and supply chains, resulting in an actual tariff rate of about 11%, lower than the expected 15%, as noted by Dubravko Lakos-Bujas and his team. Only 14% of S&P 500 firms are highly exposed to tariffs.

There is potential for further improvement if the U.S. Supreme Court determines that the president does not have the authority to impose tariffs without congressional approval, according to the bank.

“Prediction markets currently give over a 65% chance that the Supreme Court will rule against the administration, and these odds have remained steady, especially after the November oral arguments,” Lakos-Bujas told clients.

Economic Growth Surpasses Expectations

Analysts were also encouraged by a revised estimate showing U.S. GDP grew by 4.4% in last year’s third quarter.

Chris Zaccarelli, chief investment officer at Northlight Asset Management, commented in an email to Fortune: “A 4.4% real growth rate is well above average and may slow as the year progresses, but maintaining growth above 3% could result in double-digit stock market returns.”

Gregory Daco, Chief Economist at EY-Parthenon, echoed this sentiment, noting, “The momentum was fueled by strong consumer spending, significant investment in equipment and AI, a notable boost from net international trade, and increased federal government spending. The U.S. economy is not overheating or stalling—it is adapting.”

These factors contribute to the current sense of stability in the markets.

Volatility Subsides

Jim Reid and his team at Deutsche Bank observed, “For some assets, it’s as if the recent selloff never occurred. The VIX volatility index dropped by 1.26 points to 15.64, now below its level before Saturday’s tariff news.”

Pre-Market Snapshot

Here’s a look at major market indicators ahead of the New York open:

• S&P 500: Futures down 0.24% this morning, after a 0.55% gain in the previous session.
• STOXX Europe 600: Down 0.22% in early trading.
• FTSE 100 (UK): Down 0.11% at the start of the day.
• Nikkei 225 (Japan): Up 0.29%.
• CSI 300 (China): Down 0.55%.
• KOSPI (South Korea): Up 0.76%.
• NIFTY 50 (India): Down 0.95%.
• Bitcoin: Unchanged at $89,900.