Market Volatility Eases; United Airlines Stock Climbs on Strong Profit Forecast.

Stock markets in both Canada and the U.S. saw a significant rebound. This followed a reversal of recent trade tensions. U.S. President Donald Trump eased his stance on Greenland-related tariffs. He also confirmed a framework deal about Greenland. This news provided a positive sentiment to the market.

North American Market Performance

Canadian and U.S. indexes posted strong gains. The S&P/TSX composite index was up 101.25 points. It closed the day at 32,851.53. This index also benefited from a rise in energy stocks. Energy stocks found support from AI capital expenditure.

In New York, the Dow Jones industrial average jumped 588.64 points. It finished trading at 49,077.23. The S&P 500 Index gained 78.76 points. It closed at 6,875.62. The Nasdaq composite was up 270.50 points.

Aviation Sector Boosted by United Airlines

The airline industry benefited from the broader market rally. United Airlines stock climb led the sector. Shares for the carrier rose 2.2 per cent. This followed the release of its fourth-quarter 2025 earnings. The airline industry profit outlook remains strong.

United Airlines reported a better profit than analysts expected. CEO Scott Kirby noted the strong revenue momentum. This momentum is continuing into 2026. The results reflect continued strong travel demand.

Theresa Shutt, a chief investment officer, commented on the results. She noted the results reflect the K-shaped economy. Demand remains high from wealthy consumers. This group continues to spend on luxury items like air travel. The implementation of premium seats also helps revenue.

The "TACO" Trade Pattern

Market experts noted the pattern of volatility and reversal. President Trump often makes aggressive statements. These statements are part of his negotiating tactics. He then tends to soften his positions and pull back.

This pattern gave rise to the “TACO” acronym. Trump Always Chickens Out is the full phrase. Shutt stated the “TACO trade is still clearly very much in play”. Many investors avoid betting “all in on the down trade”. They factor in the potential for Trump to change his mind. The President himself acknowledged the market drop. He called the Tuesday decline “peanuts” compared to the overall gains.

• United Airlines reported Q4 2025 adjusted EPS of $3.10, beating analyst estimates.
• The U.S. stock markets rise followed President Trump easing tariffs and ruling out military action on Greenland.
• The market’s reaction reinforced the “TACO” trade, which anticipates a policy reversal after aggressive threats.
• Strong travel demand, especially for premium seats, is expected to continue into 2026.

Meanwhile, the Canadian dollar traded for 72.39 cents US. This compares to 72.31 cents US on Tuesday. The March crude oil contract was up 26 cents US. It settled at US$60.62 per barrel. Gold also saw movement, with the February contract up US$71.70. It closed at US$4,837.50 an ounce.

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