Breaking — Markets Rally Because Trump Won't Attack Our Allies
That's the bar now. "He won't invade Denmark" is good news. Meanwhile, he told Europe: "Say yes, or we will remember."
While others stenograph, grift, or chase the next distraction—this is the news that matters and how it’s connected.
This is where we are: Markets rallied on Wednesday because the President of the United States announced he won't launch a military invasion of NATO territory. For now.
“I don’t want to use force. I won’t use force,” Trump said at Davos, after noting the U.S. military would be “frankly, unstoppable” if he changed his mind.1 Stocks immediately jumped—the Dow rose 141 points. Treasury yields dropped. Gold, which had surged to record highs above $4,800 as investors fled to safety, stabilized.2 Investors breathed a sigh of relief. The threat of America attacking Denmark has been downgraded from “imminent” to merely “implied.”
That’s the good news. Here’s the rest.
Trump delivered a 72-minute tirade at the World Economic Forum that insulted allies and ended with a threat dressed as diplomacy: “They have a choice: You can say yes and we will be very appreciative, or you can say no, and we will remember.”¹
Read that again. The President is telling a NATO ally: surrender your territory or face consequences. The fact that those consequences are now economic rather than military doesn’t change what this is. It’s still coercion. It’s still extortion.
The Contempt
Treasury Secretary Scott Bessent set the tone earlier in the day. When asked about a Danish pension fund selling $100 million in U.S. Treasuries, Bessent’s response: “Denmark’s investment in U.S. Treasury bonds, like Denmark itself, is irrelevant.”²
That’s how this administration talks about allies. Irrelevant. Denmark—a nation whose soldiers died alongside Americans in Afghanistan. Bessent also dismissed the market selloff as noise amplified by “the fake news media.”²
The contempt wasn’t limited to Denmark. Trump mocked French President Macron to his face (”You’ve been screwing us for 30 years”), reminded Europe it would be “speaking German and little Japanese” without America, and proclaimed that “certain places in Europe are not even recognizable anymore.”¹
And after all that? "I want to congratulate you. I'm with you all the way." He'd spent an hour attacking everyone in the room.
The Fallout
European Commission President Ursula von der Leyen has already called Trump’s tariff threats a “mistake” that would plunge Europe and the U.S. into “a dangerous downward spiral.” The EU’s response, she said, will be “unflinching, united and proportional.”²
The European Parliament’s trade committee chair is expected to announce a suspension of the U.S.-Europe trade deal finalized last summer.² French President Macron has put the EU’s Anti-Coercion Instrument on the table—a weapon that could exclude American companies from public contracts, restrict foreign investment, and limit Big Tech’s access to the European market.²
On Tuesday, the European Central Bank’s chief Christine Lagarde walked out of a Davos dinner during Commerce Secretary Howard Lutnick’s remarks.¹ The transatlantic alliance is fracturing in real time.
The Pattern
Four days ago, Trump posted AI-generated images of American flags over allied territory and leaked private texts from Macron and NATO's secretary general. Three days ago, eight NATO allies issued a joint statement calling his tactics a threat to the alliance. Yesterday, all three benchmark indexes logged their worst daily performance since October on fears of military action against Denmark.²
Today, markets rallied because Trump finally said he won’t.
This is the new normal: relief that the President isn’t actively planning to attack our friends. That’s the bar. “He won’t invade Denmark today” is now cause for celebration on Wall Street. JPMorgan’s chair of global research noted that “America First is quietly driving diversification away from dollar assets.”² The “Sell America” trade from last year’s tariff chaos is back.
Meanwhile, the coercion continues. The contempt for allies continues. Trump still demands “immediate negotiations” on Greenland.¹ The only thing that’s changed is the method—economic warfare instead of actual warfare. For now.
The Call
This isn’t an isolated incident. We track stories like this using the fascism syndrome—ten indicators that a democracy is sliding into fascism—so you don’t lose the thread in the daily chaos:
Aggression as virtue: “We will remember.” Tariffs as punishment. Dominance as the only diplomatic currency. When “I won’t attack you” is framed as generosity, that’s not diplomacy—it’s a protection racket.
War on reality: “Inflation has been defeated.” “Our relations have never been closer.” Claims that contradict what every consumer and every ally can see with their own eyes.
Cult of the leader: Markets swing wildly on his whims. Allies must calibrate to his moods. Policy is whatever he feels like saying today.
Threaten force. Back off force. Demand submission anyway. Mock the people you’re supposed to protect. Insult the allies you’re supposed to lead. That’s not statecraft. That’s fascism with a media strategy.
But naming the disease is only half the job.
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Dave Lawler and Zachary Basu, “In Davos speech, Trump rules out using military force to take Greenland“, Axios, January 21, 2026.
Analysis of Trump’s 72-minute Davos speech documenting his insults to European allies, his mocking of French President Macron (”You’ve been screwing us for 30 years”), and his claim that certain parts of Europe are “not even recognizable anymore.” Reports the “we will remember” threat to allies who refuse to negotiate on Greenland, and Trump’s statement ruling out military force while noting the U.S. would be “unstoppable” if he changed his mind. Notes that ECB chief Christine Lagarde walked out of a Davos dinner during Commerce Secretary Lutnick’s remarks the previous evening.
Sean Conlon, Chloe Taylor, and Pia Singh, “Stocks rebound from big sell-off after Trump rules out military action on Greenland: Live updates“, CNBC, January 21, 2026.
Market analysis documenting the immediate rally following Trump’s statement ruling out military force, with the Dow rising 141 points and yields dropping. Reports Treasury Secretary Bessent calling Denmark and its investments “irrelevant” and dismissing market concerns as “fake news media” amplification. Documents European Commission President von der Leyen’s warning of “unflinching” response and reports the EU trade committee chair is expected to announce a suspension of the U.S.-Europe trade deal.
Questions about Trump's pronouncement: "You can say yes and we will be very appreciative, or you can say no, and we will remember."
1) Does he really believe Europeans will buy this? He's essentially saying, "Give us part of your territory and we will give you some unspecified thing of unspecified value at an unspecified time in the future" to people who negotiated a free trade agreement with Trump six months ago that he just binned by raising tariffs unilaterally. But he could be that far out of touch with reality that he thinks he's making a genuine offer.
2) Is this just posturing to his voters, who are delusional enough to believe he's "strong?"
Sharp framing on how normalized volatility becomes the strategy itself. The whipsaw between threat and restraint isnt just chaos but actualy a feature that keeps everyone recalibrating their risk models daily. Saw similar patterns with central banks in emerging markets where policy uncertainty itself becomes the transmission mechanism. The point about economic coercion replacing military threats is spot on but misses how that shift signals deeper structural weakness in the coercive power itself.