US stocks jump on easing tariff worries, lower bond yields
Trader Michael Capolino works on the floor of the New York Stock Exchange. Wall Street rose on Tuesday as Washington paused tariffs on the European Union. (AP Photo/Richard Drew)
NEW YORK, United States — Wall Street jumped Tuesday after President Donald Trump pushed back tariffs on Europe. Meanwhile, US Treasury bond yields retreated following last week’s surge.
Trump on Monday said he would pause his threatened 50-percent tariffs on the European Union until July 9. This is to allow for talks, and reversed an escalation that upset markets on Friday.
Analysts also cited a surprisingly big improvement in US consumer confidence and a pullback in Treasury yields. The 30-year bond fell below 5 percent following reports Japan will temper its long-term bond issuance.
The Dow Jones Industrial Average finished up 1.8 percent at 42,343.65.
The broad-based S&P 500 gained 2.1 percent to 5,921.54. Meanwhile, the tech-rich Nasdaq Composite Index advanced 2.5 percent to 19,199.16.
READ: Asean’s lessons for the EU
It is “certainly a positive start to the week, reversing a lot of what transpired last week. But clearly (we’re) not out of the woods yet,” said Angelo Kourkafas of Edward Jones. He described investors as being in “a headline-driven market.”
Major US indices had declined on Friday after Trump revived his trade war posture. He threatened new levies on the EU and on Apple and other smartphone companies that do not manufacture in the United States.
But with Trump’s latest shift on tariffs, “investors now understand there is a path forward that could be bullish,” said Adam Sarhan of 50 Park Investments.
READ: Tesla EU sales slump 53% in April – trade group
Among individual companies, Tesla shot up 5.9 percent after billionaire CEO Elon Musk pledged to return “24/7” to work on his commercial ventures. This signaled that Musk will further retreat from politics.
On the downside, Tesla’s sales fell by more than 50 percent in April compared with the year-ago period. This is according to data from the European Automobile Manufacturers’ Association.
Trump Media and Technology Group plunged 11 percent after announcing plans to raise $2.5 billion in common stock and convertible senior secured notes as it creates a “bitcoin treasury.”
Salesforce rose 1.5 percent after announcing a purchase of Informatica for $8 billion. Salesforce seeks to boost its artificial intelligence holdings.
This week’s calendar includes key US inflation data as well as results from AI titan Nvidia.
Sarhan rated the Nvidia results a major driver of broad stock performance, saying “all eyes are on Nvidia.”
