KUALA LUMPUR, Jan 23 (Bernama) -- Bursa Malaysia’s benchmark index recouped earlier losses to settle higher, maintaining a more than six-year high, buoyed by continued buying interest in technology stocks, while the strengthening of the ringgit against the US dollar further lifted investor sentiment. At 2.27 pm today, the local currency strengthened to 3.9992 versus the greenback, its strongest level in more than seven years. It was last seen at this level on June 18, 2018, at 3.9960/9990. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 2.85 points or 0.17 per cent to 1,719.99 from yesterday’s close of 1,717.14. The index surpassed its previous peak of 1,719.00 recorded on Feb 26, 2019. The barometer index opened 1.30 points lower at 1,715.84 and moved between an intraday low of 1,711.89 in early trade and a high of 1,723.41 in late afternoon before slipping slightly toward the close. However, market breadth was negative with decl...
US stocks staged a sharp rebound after President Donald Trump walked back tariff threats against European allies linked to his Greenland push. While markets welcomed the reprieve, the speed and size of the whipsaw underscored how fragile sentiment has become — and why volatility may be here to stay.
What Happened
After a bruising selloff a day earlier, Trump said he would abandon plans to impose levies on Europe, citing a “framework of a future deal” involving Greenland. That was enough to trigger a relief rally, though details remain scarce.
Dow Jones Industrial Average: +1.2% (~600 points)
S&P 500: +1.16% (best day since Nov 24)
Nasdaq Composite: +1.18%
Cboe Volatility Index: -15.9%
Key point: The rally failed to fully erase the prior day’s losses, reflecting lingering uncertainty.
The Return of the “TACO Trade”
Wall Street’s shorthand — “TACO” (Trump Always Chickens Out) — resurfaced. The pattern: markets panic on tariff threats, then rebound when policies are delayed or softened.
Investors increasingly view market drawdowns as a constraint on policy
Trump’s history of walking back tariffs has trained traders to buy fear
This time, relief came quickly — but confidence remains thin
Key point: Markets are trading the expectation of reversals, not policy clarity.
Why This Is a Warning, Not Just a Win
Strategists cautioned that once tariffs enter the conversation with major trading partners, markets must react immediately. The abrupt swing from panic to relief highlights headline-driven fragility.
Dollar stabilized after “sell America” chatter
Gold eased from near-record highs
Volatility fell sharply — but remains elevated relative to recent calm
Key point: Violent reversals signal higher risk premiums ahead.
What Investors Are Watching Next
Attention now shifts beyond tariffs to politics and timing:
Midterm elections historically bring higher volatility
Policymakers may “test” markets with trial balloons
With stocks strong after a multi-year rally, drawdowns may bite harder
As one strategist put it, volatility is the toll investors pay to stay invested — and 2026 could collect more of it.
Bottom Line
The tariff reversal delivered a welcome bounce, but it also revealed a market highly sensitive to political headlines. Expect more whipsaws, not fewer, as negotiations, elections and policy signals collide.
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