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U.S. stocks rose sharply Tuesday, with the S&P 500 climbing over 2%, the Nasdaq gaining 2.5%, and the Dow Jones Industrial Average rising 740 points, or 1.8%, in a rebound from last week’s selloff.
Bond yields declined around the globe, including in the U.S., where the 10-year Treasury dipped below 4.5%. Gold tumbled 2%.
The catalyst: President Donald Trump announced a delay in his threatened 50% tariff hike on European imports, opting instead for expedited trade talks with the E.U. The move followed a weekend call with European Commission President Ursula von der Leyen and marks a sharp turn from Friday’s rhetoric, which had markets on edge — especially after Trump warned Apple that foreign-assembled iPhones could soon face steep levies.
Still, to call this diplomatic progress would be a stretch
Consider the actual events: Trump escalated a conflict by threatening 50% tariffs on the E.U., including on Apple’s (AAPL-0.39%) foreign-assembled iPhones, essentially manufacturing a crisis. Then, after a phone call, he announced a delay on those tariffs, positioning the pause as a negotiated victory or goodwill gesture. But since he created the crisis in the first place, the “deal” or “pause” is just Trump backing off his own threat.
Another weird twist in the story? In the same social media post that kicked off the weekend’s trade crisis, Trump threatened a specific 25% tariff on iPhones not assembled in the U.S. This prompted critics — including hedge fund manager Spencer Hakimian in a widely shared tweet — to point out that such policy would mean firms like Samsung, which fully produce their products abroad, would in fact face lower levies and effectively be granted a price advantage vs. actual American companies like Apple.
After the tweet went viral, Trump pivoted, issuing a similar tariff warning to Samsung.
In this way, the rally comes with a whole string of asterisks
Markets have been whipsawed again and again in 2025 as the White House pivoted, then pivoted again, repositioning global trade policy in posts and offhand comments. The current reprieve hinges on progress in fast-tracked talks between now and July 9, the new deadline Trump has set for potential tariff implementation.
For now, though, stocks are flying — helped along by rallying bonds and the hope that this latest tariff scare will end not with a bang but a negotiation.
The rest of the week promises more market-moving news. Semiconductor giant and AI bellwether Nvidia (NVDA-1.54%) reports after the bell tomorrow, with investors watching closely and the results likely to dominate headlines for several days.
The results of the Fed’s early May meeting will also be released Wednesday. While no surprises are expected, every word is still likely to be parsed for any clues on inflation and potential rate cuts in the back half of 2025.