The S&P 500 rose 2%, breaking a four-day streak of losses, as the postponement of EU tariffs buoyed market sentiment. Stocks experienced a notable increase on Tuesday following President Donald Trump’s announcement over the holiday weekend regarding his agreement to postpone the imposition of 50% tariffs on the European Union. The Dow Jones Industrial Average increased by 740.58 points, equivalent to 1.78%, concluding at 42,343.65, whereas the S&P 500 advanced by 2.05% to reach 5,921.54. Both ended their four-day losing streaks. The Nasdaq Composite surged 2.47% to 19,199.16, driven by significant gains in technology stocks such as Tesla.
On Sunday, Trump announced that he would extend the deadline for the 50% levy on the EU to July 9, responding to a request from Ursula von der Leyen, the president of the European Commission. That follows Trump’s proposal last week for a 50% import tax on the EU, set to commence on June 1. Kevin Hassett, director of the National Economic Council, stated on CNBC’s “Squawk Box” that he anticipates “seeing a few more deals even this week.” On Tuesday, the U.S. consumer confidence data for May exceeded expectations, buoyed by optimism surrounding trade agreements.
Tesla shares surged approximately 7% following CEO Elon Musk’s announcement that he would be redirecting his attention from political matters back to his businesses. Other technology-related companies experienced gains as well, including Nvidia, AMD, Apple, and Microsoft. In a development outside the technology sector, U.S. Steel shares experienced an increase of approximately 2% following reports from sources familiar with the matter that Japan’s Nippon Steel is anticipated to finalize its acquisition at a price of $55 per share.
Stocks experienced a widespread rally at the start of the abbreviated trading week, following the closure of the U.S. equities market on Monday in observance of Memorial Day. Over 90% of S&P 500 stocks experienced an increase. Small caps experienced an uptick, as evidenced by the Russell 2000’s increase of approximately 2.5%. Tuesday’s action comes on the heels of a week marked by losses on Wall Street. The Dow, S&P 500, and Nasdaq Composite experienced declines exceeding 2% as Trump’s preliminary proposal for tariffs on the EU raised concerns among market participants.
“It appears that the extended holiday weekend merely contributed to the momentum observed in today’s market fluctuations,” remarked Dann Ryan, managing partner at Sincerus Advisory. “The trade tensions that had flared have already been extinguished, yet again, and now they’ll include an express lane.” This week, traders will monitor earnings reports from Okta, scheduled for release after the bell on Tuesday, with subsequent reports from companies like Nvidia, Macy’s, and Costco later in the week. Over 95% of S&P 500 companies have disclosed their earnings this season, with nearly 78% exceeding analyst forecasts.
The three major indexes concluded Tuesday’s session with gains, breaking a four-day losing streak for the S&P 500 and Nasdaq Composite. The S&P 500 experienced an increase of approximately 2.1%, whereas the Nasdaq surged by 2.5%. The Dow surged by over 700 points, representing an increase of 1.8%.
According to Trivariate Research, investors appear to be biding their time, anticipating the emergence of robust catalysts in the stock market. “At this moment, it appears that there is a lack of strong conviction — whether bullish or bearish — regarding the stock market. “Fundamentals might deteriorate from here,” founder Adam Parker wrote in a Sunday note. Conversely, the absence of pronounced bearish sentiment may not inherently pose a negative outlook for the market. “We tend to think, and many investors agree, that the only tariff-related conversation that really matters is what the U.S. does with China,” Parker added. “Taking it all in, even if macro headwinds persist, there’s a growing view that S&P500 earnings might end up being less impacted than many, including us, originally feared.”