President Donald Trump has some optimistic predictions for the stock market. Speaking to global leaders at the World Economic Forum in Davos on Wednesday, he told the assembled business and political elite that the SPDR Dow Jones Industrial Average ETF (DIA) is heading for 50,000. And he didn't stop there—Trump added that the stock market could double "in a relatively short period of time."

The Iceland Excuse and the "Peanuts" Defense

Trump had an interesting explanation for Tuesday's market turbulence. "The stock market took the first dip yesterday because of Iceland, so Iceland already cost us a lot of money, but that dip is peanuts compared to what it's gone up," he said during his special address. "And we have an unbelievable future that stock market is going to be doubled."

By Wednesday morning, the Dow was trading at 48,819.98, up 331.39 points or 0.68%. So much for that dip.

What Actually Happened Tuesday

U.S. equities had a rough go of it Tuesday, triggered by Trump's increasingly aggressive trade stance toward Europe. The S&P 500 fell 1.5% to 6,840, marking its worst session since late November. The catalyst? Trump threatened several European countries with an additional 10% tariffs starting Feb. 1 if negotiations over Greenland control don't go his way.

That's the kind of geopolitical brinkmanship that makes traders nervous, and the selloff reflected exactly that anxiety.

Wednesday's Comeback Story

Markets bounced back Wednesday following Tuesday's risk-off session. Energy stocks led the charge, with the Energy Select Sector SPDR Fund (XLE) jumping 2.5%. But the real star of the day was Intel Corp. (INTC), which emerged as the top performer among mega-cap names with a massive 10.4% surge.

Whether Trump's prediction of a doubled market comes to pass remains to be seen, but for now, investors seem willing to treat Tuesday's decline as exactly what the president called it: peanuts.