European stocks closed sharply higher Thursday after U.S. President Donald Trump announced a "framework" agreement over Greenland and rescinded threats of escalating tariffs on several European nations.

The pan-European Stoxx 600 gained 1.1%, with all major regional bourses and most sectors finishing in positive territory. The rally was led by auto and healthcare stocks, which are heavily exposed to transatlantic trade. The auto sector rose 2.3%, while healthcare advanced 1.7%.

The surge followed Trump’s announcement that he and NATO Secretary General Mark Rutte had agreed on a "framework of a future deal" involving Greenland, which he described as a collaboration on a proposed Golden Dome missile defense system and access to the island's mineral resources. As a result, Trump said he would not proceed with threatened tariff hikes on European allies.

Danish Prime Minister Mette Frederiksen welcomed the shift, stating her openness to talks on the Golden Dome provided Denmark’s sovereignty is respected.

The news eased fears of a renewed trade conflict and potential strain on NATO. Gold prices, which had surged to record highs amid recent uncertainty, cooled slightly, with U.S. futures settling at $4,883 per ounce.

In corporate news, Volkswagen shares jumped 6.2% after reporting a 20% rise in net cash flow, while French video game maker Ubisoft plunged 36.6% following a major restructuring announcement.

The British pound strengthened 0.51% against the dollar amid political speculation, and U.K. insurer Beazley rejected a £7.7 billion takeover bid from Zurich Insurance.