U.S. stocks closed sharply higher Wednesday after President Donald Trump retreated from proposed tariff measures tied to his push to acquire Greenland, easing investor concerns over escalating trade tensions with Europe.

The Dow Jones Industrial Average rose 588 points, or 1.2%. The S&P 500 gained 1.1%, while the Nasdaq Composite advanced 1.1%, recovering most of the losses recorded in the previous session.

Markets surged in afternoon trading after Trump announced he would roll back proposed tariffs that were set to take effect February 1 on goods from seven European Union countries and the United Kingdom.

Earlier in the day, stocks posted modest gains after Trump said during a speech at the World Economic Forum in Davos that he would not use military force in pursuit of Greenland. However, sentiment remained cautious as European officials continued to respond to the tariff threat.

Minutes after Trump’s Davos address, European lawmakers suspended a trade agreement with the United States that had been reached in July to reduce tariffs on European goods and stabilize transatlantic commercial relations.

European leaders had described Trump’s proposed levies as a direct threat linked to Greenland, a self-governing territory within the Kingdom of Denmark.

Under Trump’s initial plan, eight European nations — including Denmark, France, Germany and the United Kingdom — faced 10% tariffs starting February 1, with rates scheduled to rise to 25% by June 1.

In a social media post issued mid-afternoon, Trump said he was withdrawing the tariff threat after reaching a “framework” agreement with NATO concerning Greenland.