U.S. stocks soared Tuesday after President Donald Trump agreed to delay a proposed 50% tariff on European Union imports.
This pause eased investor concerns over an escalating trade war and paved the way for accelerated negotiations.
The Dow Jones Industrial Average rose nearly 740 points while the S&P 500 climbed 2.05%. The tech-heavy Nasdaq Composite jumped 2.46%, with shares of Nvidia, Tesla, and Apple posting strong gains.
Markets reopened following the Memorial Day holiday to a flurry of positive signals. U.S. President Donald Trump said over the weekend that the tariff hike, initially set for June 1, would be pushed back to July 9 following talks with European Commission President Ursula von der Leyen.
The European Union, in turn, agreed to expedite trade discussions in hopes of averting the “mutual pain of tariffs,” according to EU trade chief Maroš Šefčovič.
Consumer confidence rebound
Investor sentiment was further buoyed by a rebound in consumer confidence, which rose in May after five months of declines. Tuesday’s broad market rally saw more than 90% of S&P 500 components close higher. Small-cap stocks also gained, with the Russell 2000 up more than 2%.
The optimism extended to the bond market, where U.S. Treasurys rallied and yields fell. The 10-year yield slipped to 4.43%, while the 30-year yield dropped to 4.94%. The dollar strengthened, and global bond markets responded positively to speculation that Japan will scale back long-term bond issuance after recent volatility.
Investors are now turning attention to a busy week of economic data and earnings. Minneapolis Fed President Neel Kashkari called for the central bank to hold interest rates steady amid ongoing trade uncertainty.
Meanwhile, Nvidia is set to report quarterly results Wednesday, with Okta, Macy’s, and Costco also on deck.
Tuesday’s rally helped reverse last week’s losses, which were triggered by Trump’s initial tariff threats. Analysts say the back-and-forth has kept markets volatile but hopeful.
Credit: Source link
