The Dow Jones Industrial Average surged 597.97 points, or 1.42%, to close at 42,583.32 on Monday. The S&P 500 added 1.76% to settle at 5,767.57, while the tech-heavy Nasdaq Composite gained 2.27% to finish at 18,188.59. The rally came amid optimism that President Donald Trump may hold back from implementing some of his comprehensive tariff plans.
This could potentially allow the U.S. to avoid an economic slowdown from a protracted trade war. In comments made late Monday, President Trump hinted that he may offer tariff breaks to many countries. He also confirmed that tariffs on sectors such as pharmaceuticals and autos would be postponed.
This news appeared to lift market sentiment, suggesting a more targeted and tactical tariff strategy could reduce the risks of a full-scale trade war. “Market conditions are improving dramatically as the angst around reciprocal tariffs is somewhat diminishing,” said Charlie Ripley, senior investment strategist at Allianz Investment Management. “We see this as a potential lift to growth in the U.S., should reciprocal tariffs come in a more watered-down form.”
Investor concerns over inflation and recession have been evident, with stocks rapidly declining since late February.
However, recent reports of potentially more narrow and delayed tariffs helped boost investor confidence, leading to significant gains on Monday. Oklo Inc.’s stock rose more than 13% after announcing that the Nuclear Regulatory Commission will begin assessing whether its license application for an advanced microreactor at Idaho National Laboratory is ready for full review. CEO Jacob DeWitte highlighted this progress towards obtaining commercial licenses for next-generation nuclear technologies.
Consumer discretionary stocks, previously the worst-performing sector of 2025, led the S&P 500 on Monday.
markets rally amid Trump’s tariff hint
The sector, notably boosted by a 10% rise in electric vehicle stock Tesla, enjoyed its best daily performance since November 2023.
Pinterest shares climbed 4.5% following an upgrade from Guggenheim analyst Michael Morris, who changed his rating to buy from neutral. Morris cited the recent price pullback as a buying opportunity and projected significant future growth in user monetization and advertising performance. Defense tech company Palantir saw its stock rise more than 5% on Monday, marking a continued strong performance following a 4% increase on Friday.
The stock has jumped over 26% this year, though it remains well below its record high. The Treasury Department extended Chevron’s license to pump oil in Venezuela until May 27. This decision came after President Trump stated countries that purchase crude from Venezuela would not face sanctions, reversing a prior move by the Biden administration.
Despite Trump repeatedly proclaiming next Wednesday as “Liberation Day,” promising massive reciprocal tariffs, administration officials are now trying to manage expectations. Reports indicate that a smaller batch of tariffs will be announced next week, with the situation still fluid. The S&P 500 and Nasdaq experienced their steepest monthly declines since December 2022, as uncertainty surrounding new tariffs proposed by former President Donald Trump significantly weighed on the markets during the first quarter of 2025.
The S&P 500 recorded its largest quarterly drop since the third quarter of 2022, while the Nasdaq saw its biggest decline since the second quarter of 2022. Investors are bracing for an announcement from Trump, expected on Wednesday, wherein he will outline extensive new tariffs. This anticipation has fueled market volatility, leading to widespread fears of a potential global recession.
