Stocks went up around the world on Monday after President Donald Trump decided to temporarily ease some of his tariffs, and worries in the U.S. bond market started to calm down.
The S&P 500 increased by 0.8%, although trading stayed unstable and at one point, the index lost all of its earlier 1.8% gain. The Dow Jones Industrial Average rose by 312 points, or 0.8%, while the Nasdaq composite added 0.6%.
Technology companies such as Apple gave a boost to Wall Street after Trump said smartphones, computers, and other electronics would be left out of some of the strict tariffs. These tariffs could more than double the cost of Chinese products for U.S. buyers. With this exemption, U.S. companies that import these goods don’t have to either raise prices for customers or accept lower profits.
Apple’s stock went up by 2.2%, and Dell Technologies gained 4%.
Car companies also saw gains after Trump hinted that he might soon delay tariffs for the auto industry. General Motors went up by 3.5%, and Ford Motor rose by 4.1%.
By the end of the day, the S&P 500 had risen by 42.61 points to close at 5,405.97. The Dow Jones increased by 312.08 points to 40,524.79, and the Nasdaq composite added 107.03 points to reach 16,831.48.
However, the relief investors felt may not last. Trump’s tariff plans have changed often, and his administration said this latest exemption for electronics is only for now.
This ongoing uncertainty makes it hard for businesses to make future plans, since the rules seem to change quickly. That same uncertainty caused big swings in the U.S. stock market last week, as investors tried to keep up with Trump’s decisions. If the tariffs continue or increase, they could lead to a recession.
Still, China’s commerce ministry welcomed the break from electronics tariffs in a statement on Sunday and called it a small step. However, it asked the U.S. to cancel all remaining tariffs. On Monday, Chinese President Xi Jinping said “no one wins in a trade war” as he started a diplomatic trip in Southeast Asia, aiming to show China as a steady presence in comparison to Trump’s frequent changes.
Back in the U.S., Goldman Sachs gained 1.9% after reporting better-than-expected profits for the recent quarter. Other big banks like JPMorgan Chase and Morgan Stanley also had stronger results.
Wall Street was further encouraged by signs of calm in the bond market. Treasury yields dropped after their sharp and worrying rise the previous week, which had made not only investors nervous but seemed to get Trump’s attention as well.
A man stands near an electronic board displaying stock prices at the Indonesia Stock ExchangeYields on Treasury bonds usually fall when fear in the market is high because U.S. government bonds are often seen as a safe choice. But last week, yields rose sharply, which is unusual. At the same time, the U.S. dollar lost value against other currencies, showing that investors might no longer see the United States as the safest place to keep their money during stressful times.
Trump pointed out these bond market changes, which showed that investors were “getting a little queasy,” after he announced a 90-day delay on many of his tariffs last week.
Lisa Shalett, the chief investment officer at Morgan Stanley Wealth Management, said that the fact Trump reacted only after the bond market’s unsettling move—but not after the stock market became unstable—“reveals this administration’s Achilles’ heel.”
The yield on the 10-year Treasury bond dropped to 4.37% after rising to 4.48% on Friday from 4.01% the week before.
Yields fell after a helpful report from the bond market about inflation expectations among American consumers. While households expect inflation to rise in the coming year, their longer-term expectations for inflation in three and five years either stayed the same or dropped slightly, based on a survey by the Federal Reserve Bank of New York.
This could be good news for the Federal Reserve, which doesn’t want long-term inflation expectations to rise quickly. If people expect prices to rise more in the future, they may start spending differently, which can make inflation worse.
The U.S. dollar stayed weak. It dropped in value against the euro and Japanese yen, although it rose a bit against the Canadian dollar.
Foreign stock markets also went up. Indexes in France rose 2.4%, in Germany 2.9%, in Japan 1.2%, and in South Korea 1%.
In China, stocks climbed too. Hong Kong’s index gained 2.4%, and Shanghai’s rose 0.8% after the government said China’s exports went up 12.4% in March compared to the same month last year. This increase happened as companies rushed to ship goods before U.S. tariffs increased.
