Wall St climbs Trump dials back EU tariff threats

Wall Street’s main indexes have risen after US President Donald Trump dialed back his threat of tariffs on EU imports, defusing trade tensions between the United States and the European bloc and boosting investor sentiment.

On Sunday, Trump rolled back his threat to impose 50 per cent tariffs on imports from the EU next month, restoring a July 9 deadline to allow for talks between Washington and the 27-nation bloc.

He had initially threatened EU tariffs on Friday alongside announcements of higher tariffs on Apple’s iPhones.

“The negotiating style of President Trump is known by now. It will come at you hard and then they’ll be able to pull back a little bit,” said Joe Saluzzi, co-head of equity trading at Themis Trading.

Asian and European markets were mixed after rising on Monday, although moves in US assets were more pronounced as traders returned after the long Memorial Day weekend.

In early trading on Tuesday, the Dow Jones Industrial Average rose 392.44 points, or 0.94 per cent, to 41,995.51, the S&P 500 gained 77.66 points, or 1.33 per cent, to 5,880.48, and the Nasdaq Composite was up 333.38 points, or 1.78 per cent, to 19,070.58.

Most megacap and growth stocks jumped with Nvidia, up about 2.7 per cent, leading gains. The AI bellwether is slated to report quarterly earnings after markets close on Wednesday.

All 11 major S&P 500 sub-sectors rose, with consumer discretionary and information technology gaining the most.

Long-dated US Treasury yields dipped, while those on the 30-year note were set for their biggest one-day fall since late April, mimicking a steep price rally in longer-term Japanese debt.

In economic data, minutes from the US Federal Reserve’s last policy meeting are scheduled for release on Wednesday.

An index tracking consumer confidence rose to 98 in May, a Conference Board report showed. Economists polled by Reuters had expected the index to stand at 87.

A number of Fed officials are expected to speak through the week. Minneapolis Fed President Neel Kashkari on Tuesday called for holding interest rates steady until there was clarity on how higher tariffs impact inflation.

Personal Consumption Expenditure data – the Fed’s favoured inflation indicator – for May as well as a second estimate of first-quarter GDP are also scheduled to be released later this week.

Wall Street witnessed sharp weekly losses on Friday as worries about mounting US debt and Trump’s latest trade policy shakeup sparked a broad selloff. His sweeping tax bill – which is expected to substantially expand federal debt – won a critical House vote last Thursday.

The S&P 500 is more than four per cent from record highs, although it has rebounded sharply from its April lows as easing trade concerns and tame inflation data spurred a risk-on rally.

Temu-parent PDD Holdings dropped more than 17 per cent after missing Wall Street’s first-quarter revenue estimates.

Advancing issues outnumbered decliners by a 5-to-1 ratio on the NYSE and by a 2.78-to-1 ratio on the Nasdaq.

The S&P 500 posted 12 new 52-week highs and no new lows, while the Nasdaq Composite recorded 57 new highs and 28 new lows.