Stocks rose on Thursday, extending their gains from the previous session after easing geopolitical fears sparked a broad-based market rally.

The Dow Jones Industrial Average advanced 306.78 points, or 0.63%, and closed at 49,384.01. The 30-stock index recovered from the losses seen earlier this week following President Donald Trump's new Europe tariffs announcement. The S&P 500 climbed 0.55% and ended at 6,913.35. The Nasdaq Composite advanced 0.91% and settled at 23,436.02, supported by gains in Nvidia, Microsoft and Meta Platforms. At session highs, the Dow was up 530 points, or 1.1%, while the S&P 500 and Nasdaq gained 0.9% and 1.2%, respectively.

While the Dow has a modest gain on the week, the other two leading U.S. indexes are still pacing for a negative performance in the period. The S&P 500 has lost 0.4% and the Nasdaq has dropped 0.3% week to date.

Major U.S. stock averages jumped Wednesday after Trump said he would no longer impose new tariffs on the imports of eight European nations that were set to begin Feb. 1 and announced reaching a deal "framework" over Greenland.

Trump, who has been relentlessly pushing for U.S. control of Greenland in recent weeks, said Wednesday on Truth Social that he and NATO Secretary General Mark Rutte have "formed the framework of a future deal with respect to Greenland." The president later told CNBC that "we have a concept of a deal" with the Arctic island.

"When you look underneath the market surface and away from the market cap-weighted S&P 500 that's so dominated by ['Magnificent Seven'] and these big megacap names at the top of the index, it's like the market didn't skip a beat at all," Eric Parnell, chief market strategist at Great Valley Advisor Group, said in an interview with CNBC.

Stocks were already rising after the U.S. president earlier said in a speech at the World Economic Forum in Davos, Switzerland, that he would not move to acquire Greenland by force. The S&P 500, Dow and Nasdaq all advanced more than 1%. The Russell 2000 index of small-cap stocks gained about 2% and notched a record close.

That marked a significant turnaround from Tuesday, when Trump's tariff threats catalyzed the "sell America" trade as U.S. equities as well as the U.S. dollar faced pressure and Treasury yields soared.

"A lot of times the words that come out of the White House, it's all kind of part of the grander negotiation and that there's a certain outcome that's being driven towards, so any of the noise that takes place in the midst of that process playing out more often than not … they turn out to be buying opportunities," Parnell added. "The fundamentals underlying the market continue to be strong."

While sentiment has been upbeat in the wake of the deal "framework" announcement, the situation appears far from over. On Thursday, Danish Prime Minister Mette Frederiksen viewed Trump's discussion on Arctic security with Rutte as "good and natural" and said that the country is ready to hold talks with the U.S. on its "Golden Dome" missile defense plan. However, she stressed that sovereignty is non-negotiable.

"The Kingdom of Denmark wishes to continue to engage in a constructive dialogue with allies on how we can strengthen security in the Arctic, including the US's Golden Dome, provided that this is done with respect for our territorial integrity," Frederiksen said.