In the United States, equity markets suffered a sharp decline early last week, driven by President Trump’s rhetoric regarding Greenland. The President’s remarks that “there can be no going back” on his plans for Greenland pushed markets lower, alongside concerns that he could impose tariffs on countries that rejected his proposal to take control of the landmass. However, consistent with previous bouts of volatility linked to presidential commentary, markets found relief after several bruising sessions. The turning point came when the President announced he would not use force to acquire Greenland and subsequently walked back his threat of tariffs on EU countries opposed to the idea. These announcements, made on Wednesday evening, sent markets sharply higher and led to a significant decline in volatility. The S&P 500 recovered its entire weekly loss within 45 minutes on Wednesday, highlighting the extent of investor relief as tensions eased. Markets received a further boost on Thursday following an upward revision to US GDP growth for Q3 2025, now estimated at 4.4% compared with the previous estimate of 4.3%. For the week, the S&P 500 closed -0.58% lower, while the NASDAQ finished -0.61% lower.
In earnings news, Netflix released its Q4 results last Tuesday. The streaming giant, which has been at the centre of the Warner Bros. Discovery takeover saga alongside Paramount, reported strong Q4 2025 earnings. Revenue increased by 16% in 2025, and the company announced it had reached a new subscriber milestone of 325 million. Netflix had previously ceased reporting quarterly subscriber figures, making this the first such update in over a year. The data indicates that Netflix added 23 million subscribers during 2025. Alongside Netflix, United Airlines, Johnson & Johnson, and GE Aerospace were among the major companies reporting earnings. All three exceeded expectations, with GE Aerospace comfortably outperforming forecasts. These earnings beats point to broader market strength across sectors including travel, healthcare, and aerospace, and bode well for the remainder of the Q4 earnings season.
Turning to corporate developments, Netflix announced last week that it would revise its bid for Warner Bros. Discovery to an all-cash offer, while maintaining the deal value at $82.7 billion. This remains below Paramount’s all-cash offer of over $108 billion. Paramount is now expected to increase its bid once again, seeking to appeal directly to Warner Bros. Discovery shareholders in an effort to secure the transaction. Elsewhere, Berkshire Hathaway announced that it may sell its entire stake in Kraft Heinz after more than a decade of involvement with the food producer. However, the investment in Kraft Heinz has underperformed. Shares have lost approximately two-thirds of their value since 2015, and Buffett has previously acknowledged that he overpaid for Kraft, which was merged with Heinz in the same year.
In Europe, equity markets tumbled early last week, pressured by both President Trump’s rhetoric regarding Greenland and, more significantly, the threat of tariffs on eight countries that opposed his plans for the territory. Concerns were further amplified by worries over the health of the Japanese bond market, which spilled over into global markets. The Euro Stoxx 50 and the STOXX Europe 600 both fell by more than 1% on Monday, followed by additional declines on Tuesday and Wednesday. However, following President Trump’s remarks at the World Economic Forum in Davos — where he stated he would not use force to acquire Greenland — and his subsequent reversal on the proposed tariffs, European markets recouped much of their earlier losses. On Thursday, both indices gained more than 1%, led by luxury stocks such as LVMH and Kering, which had been among the most exposed to potential tariffs and had declined sharply earlier in the week. For the week as a whole, the Euro Stoxx 50 and STOXX Europe 600 closed -0.06% and -0.04% lower, respectively.
In corporate developments, Trafigura, one of the world’s largest commodity trading houses, sold its first cargo of Venezuelan oil to Europe as part of a 50 million barrel supply agreement between Venezuela and the United States. Spanish refiner Repsol is expected to take delivery of the shipment in February.
In the United Kingdom, the FTSE 100 recorded its worst two-day performance since November on Monday and Tuesday, driven by US tariff threats as well as concerns surrounding the Japanese bond market. However, declines were less severe than elsewhere, largely due to the index’s heavy weighting towards mining companies, which benefited from rising commodity prices, particularly gold. The index rebounded on Thursday as global tensions eased and closed the week -0.69% lower.
In corporate developments, GlaxoSmithKline announced that it has agreed to acquire a US-based biotechnology firm specialising in food allergies. The deal with RAPT Therapeutics is valued at $2.2 billion and is strategically important for GSK, as it provides access to ozureprubart, a long-acting therapy designed to protect against food allergies.
