President Trump announced a temporary reprieve from new tariffs on Tuesday, leading to a surge in US stocks and a boost in investor sentiment and consumer confidence. The Dow Jones Industrial Average rose by 1.78%, the S&P 500 increased by 2.05%, and the Nasdaq Composite jumped 2.47%. The upbeat market performance was also bolstered by a rebound in consumer confidence in May.
However, not all news was positive. Temu-parent PDD Holdings saw its shares fall due to missing quarterly revenue expectations. In contrast, Nvidia’s stock gained in anticipation of its upcoming quarterly earnings report due on Wednesday.
Macy’s, one of the leading department store operators in the US, cut its annual profit forecast amid tariff uncertainty and cautious spending on apparel and accessories. The temporary tariff reprieve comes after President Trump has faced repeated warnings that his economic agenda could worsen the nation’s debt, harm many of his own voters, and contribute far less in growth than the White House contends. Since taking office, Mr.
Temporary tariff reprieve boosts us stocks
Trump has aimed to pair generous tax cuts with sweeping deregulation that he says will expand America’s economy. He has fashioned his steep, worldwide tariffs as a political tool that will raise money, encourage more domestic manufacturing, and improve U.S. trade relationships.
However, investors who once viewed government debt as a relatively risk-free investment are now demanding that the United States pay much more to those who lend America money. Bond markets are not buying Mr. Trump’s approach, seeing an agenda that comes with more debt, higher borrowing costs, inflation and an economic slowdown.
Despite these concerns, the president chose on Friday to revive the uncertainty that has kept businesses and consumers on edge, threatening 50 percent tariffs on the European Union and a 25 percent tariff on Apple. Other tech companies, he said, could face the same rate. The EU has expressed little appetite for revisiting the nightmare of its last attempt to forge a sweeping EU-U.S. trade pact.
Diplomats and officials say two separate tracks are now in play to cool tensions and negotiate tariffs, but a wide-ranging deal seems unlikely given the EU’s red lines and political headwinds.
