What Happened?
A number of stocks jumped in the afternoon session after President Trump cooled fears of a transatlantic trade war by calling off scheduled tariffs on European allies.
The rally followed a productive meeting in Davos with NATO Secretary General Mark Rutte, where a "framework of a future deal" regarding Greenland and the Arctic region was established. By explicitly ruling out the use of military force and suspending the 10% tariffs previously set for February 1st, the administration provided the "sigh of relief" the market desperately needed after Tuesday's sharp sell-off. Technology and semiconductor leaders like Nvidia and AMD spearheaded the recovery as investors quickly pivoted back into growth stocks.
The "Sell America" trade from the prior session reversed sharply, with the Nasdaq Composite jumping 1.5% and the S&P 500 erasing its 2026 losses. This rebound was further supported by a stabilization in the bond market; as tariff-related inflation fears subsided, the 10-year Treasury yield retreated from its recent highs, creating a more favorable backdrop for equity valuations across the board.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Cloud Monitoring company Datadog (NASDAQ: DDOG) jumped 5.6%. Is now the time to buy Datadog? Access our full analysis report here, it’s free.
- E-commerce Software company Wix (NASDAQ: WIX) jumped 3.7%. Is now the time to buy Wix? Access our full analysis report here, it’s free.
- Video Conferencing company 8x8 (NASDAQ: EGHT) jumped 4.4%. Is now the time to buy 8x8? Access our full analysis report here, it’s free.
- Content Delivery company Akamai Technologies (NASDAQ: AKAM) jumped 4.5%. Is now the time to buy Akamai Technologies? Access our full analysis report here, it’s free.
- HR Software company Asure Software (NASDAQ: ASUR) jumped 4.4%. Is now the time to buy Asure Software? Access our full analysis report here, it’s free.
Zooming In On Datadog (DDOG)
Datadog’s shares are quite volatile and have had 18 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 7 days ago when the stock dropped 3% on the news that tech stocks pulled back as reports surfaced that Chinese customs authorities blocked Nvidia's H200 AI chips, effectively halting their entry despite recent U.S. export approvals.
This semiconductor sell-off, led by Broadcom and Micron, reflected deepening fears that the "AI trade" was colliding with a protectionist "new normal." Investors were concerned about the prospect of a fragmented global order where tech giants are caught between Washington's industrial strategy and Beijing's push for semiconductor sovereignty. Broadening the risk, markets were also agitated about the Justice Department's investigation into Fed Chair Jerome Powell, sparking concerns over central bank independence. This domestic political friction, paired with rising oil prices from Iranian civil unrest, likely forced a pivot from growth to defense.
Datadog is down 7.7% since the beginning of the year, and at $123.46 per share, it is trading 38.2% below its 52-week high of $199.72 from November 2025. Investors who bought $1,000 worth of Datadog’s shares 5 years ago would now be looking at an investment worth $1,195.
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