U.S. stocks jump as Trump postpones EU tariffs, boosting trade hopes. Nasdaq leads gains, investors eye Nvidia earnings and key economic data.
U.S. stock markets surged on Tuesday as President Trump postponed a sharp tariff hike on European imports, opening the door for fast-tracked trade talks. The move eased fears of a looming transatlantic trade war and fueled optimism across Wall Street, with tech stocks and bond markets also contributing to the rally.
Markets Rebound After Holiday Closure
Following the Memorial Day holiday, U.S. markets reopened to a wave of buying momentum. The Dow Jones Industrial Average climbed nearly 300 points, or 0.7%, signaling renewed confidence among investors. Meanwhile, the S&P 500 rose 1%, and the tech-heavy Nasdaq Composite outperformed with a 1.3% gain, reflecting strong investor interest in growth stocks and tech giants.
Trump’s EU Tariff Delay Boosts Sentiment
Investor optimism was primarily driven by President Trump’s weekend announcement to delay a planned 50% tariff on all European Union imports. Originally scheduled to take effect on June 1, the hike is now postponed until July 9, giving negotiators a brief window to advance trade talks.
The EU responded positively, agreeing to accelerate discussions with Washington, a sign that both sides may be looking to avoid another damaging trade confrontation. This diplomatic development provided a sense of relief for markets, which had grown anxious about escalating tensions between the U.S. and its transatlantic allies.
Bond Yields Drop as Japan Calms Global Debt Markets
In addition to the trade news, global bond markets experienced a moment of calm. U.S. Treasury yields fell sharply, driven by reports that the Japanese government may reduce bond issuance following weeks of volatility. The yield on the 30-year U.S. Treasury dropped as low as 4.95%, before settling near 4.98%.
Lower yields generally reflect lower borrowing costs and reduced inflationary expectations, which can be supportive of equity valuations—especially in interest rate-sensitive sectors like technology and real estate.
Economic Data and Fed Watch in Focus
Investors are now turning their attention to a series of key economic reports expected this week. Data releases will include figures on durable goods orders, housing market activity, and consumer confidence—all of which offer insight into the health of the U.S. economy.
Meanwhile, Federal Reserve officials are set to speak throughout the week. While no immediate policy shift is expected, markets are closely watching for any signs of deviation from the Fed’s stance on holding interest rates steady.
Tech Sector Shines as Nvidia Rally Continues
Among individual stocks, Nvidia (NVDA) was a standout performer, rising over 2% after reports surfaced about a new, lower-cost AI chip tailored for the Chinese market. The company is set to report earnings on Wednesday, with analysts calling it “the most anticipated report of the quarter” amid continued investor enthusiasm around artificial intelligence.
Other corporate earnings due this week include Okta (OKTA), Macy’s (M), and Costco (COST), which could further sway sentiment depending on their results and forward guidance.
Political Risks Linger Amid Tax Bill Debate
While trade and tech dominated headlines, political risks haven’t disappeared. President Trump’s controversial tax bill recently passed a key vote in the U.S. House of Representatives, but it still faces hurdles in the Senate. The bill includes several provisions that could significantly alter the tax landscape for corporations and high-net-worth individuals, sparking debates about its long-term economic impact.
Outlook: Cautious Optimism Returns
Tuesday’s rally underscores a return of cautious optimism to Wall Street. While uncertainties remain around trade, interest rates, and fiscal policy, investors appear encouraged by the possibility of de-escalation in U.S.-EU relations and continued strength in the tech sector.
As one analyst put it, “Markets are breathing a sigh of relief, but this is still a headline-driven environment.”
