US stocks rallied following President Trump's temporary tariff exemption on key tech products, boosting tech-heavy indices. The Dow, S&P 500, and Nasdaq all experienced significant gains. European and Asian markets also responded positively, driven by renewed confidence in the tech sector and strong Chinese export data.
Market Overview
US stocks surged in early trading after President Trump temporarily exempted key technology products from new tariffs. This exemption, including smartphones, computers, and semiconductors, significantly boosted tech indices and set a bullish tone for the week.
As of 1:15 PM ET:
- Dow Jones Industrial Average: Up 135.58 points at 40,348.29 (+0.34%)
- S&P 500: Added 19.32 points or 0.36%, trading at 5,382.68
- Nasdaq Composite: Rose modestly by 0.1%, standing at 16,741.32
Economic Data and Sentiment
The markets rose despite concerning data from the New York Fed’s consumer expectations survey, which indicated:
- A 44% probability of a higher unemployment rate in a year – the most pessimistic view since April 2020.
- Deteriorating sentiment towards the stock market, hitting its lowest point since June 2022.
- Rising concerns over near-term inflation.
Commodities and Bonds
Commodities faced headwinds as:
- Gold: Fell $20.60 or 0.63% to $3,224.
- Oil: Declined 0.99% to $60.89 per barrel.
Bond yields slipped as investors sought safety:
- The US 10-Year Treasury yield dropped sharply by 8.8 basis points to 4.405%.
Currency Markets
- EUR/USD: Edged lower to 1.134.
- VIX: Dropped 10.12% to 33.76, indicating easing market volatility.
European Markets
European markets experienced a surge in early trading:
- Germany’s DAX: Climbed 2.5%.
- France’s CAC 40: Rose 2.3%.
- London’s FTSE 100: Added 1.9%.
The rally was fueled by renewed confidence in the tech sector, with investors anticipating short-term stability in supply chains and production costs.
Asian Markets
Asian markets also showed strong momentum:
- Japan’s Nikkei 225: Closed 1.2% higher.
- Hong Kong’s Hang Seng: Rose 2.4%.
- Shanghai’s Composite Index: Gained 0.8%.
South Korean tech majors like Samsung Electronics and Advantest posted strong gains, benefiting from their links to the global semiconductor industry. China’s March export growth, up 12.4% year-on-year, boosted the region’s positive outlook.
Tariff Dynamics
The US exemption announcement followed China's imposition of tariffs of up to 125% on US goods, a retaliation for escalating US duties which have reached 145% on certain Chinese products.
President Trump emphasized that no country would escape future tariffs, with administration officials confirming new levies on strategic goods like semiconductors to be unveiled soon, citing national security concerns.
Investor Sentiment
Markets responded positively to the temporary reprieve, with Wall Street closing high last Friday:
- S&P 500: Rose 1.8%.
- Dow: Added 1.6%.
- Nasdaq Composite: Jumped 2.1%.
Strong quarterly earnings from JPMorgan Chase and Morgan Stanley helped bolster confidence.
Currency and Commodity Movements
Currencies:
- The US dollar dipped slightly.
- The yen strengthened to 143.16 per dollar.
- The euro firmed to $1.1388.
- The British pound advanced to $1.3184.
Commodities:
- West Texas Intermediate rose 1.0% to $62.10.
- Brent crude added 0.9% to $65.36.
- Gold edged down by $9 to $3,235 per ounce.