Risk Appetite Recovers as Trump Signals Tariff Leniancy – US Market Wrap

Stocks rallied as traders bought battered tech stocks, extending an advance fuelled by signs that US trade policies will be more targeted than expected, with President Donald Trump indicating that he may give tariff breaks to a number of countries. Bonds fell alongside gold. The dollar fluctuated.

Wall Street’s risk-on bid lifted shares of almost every size, from small to large cap, in a rebound that followed a selloff from all-time highs that called into question the notion of US exceptionalism. The S&P 500 increased by nearly 2%. Tesla soared 12%, leading megacap gains. That comes after a slide that puts the “Magnificent Seven” tech behemoths on track for their worst quarter since 2022. A closely watched index of chipmakers rose 3%. The cryptocurrency market skyrocketed.

Markets gripped by anxiety about an all-out trade war got relief from signs the coming wave of tariffs is shaping up as more focused than the sprawling, fully global effort Trump has otherwise mused about.

The President said his tariff rollout next week would focus on so-called reciprocal tariffs, featuring rates on a country-by-country basis corresponding to levies and other trade barriers on US products.
Trump twice on Monday signaled trading partners would receive possible exemptions or reductions.

The S&P 500 rose 1.8%. The Nasdaq 100 climbed 2.2%. The Dow Jones Industrial Average added 1.4%. A gauge of the Magnificent Seven megacaps gained 3.4%. The Russell 2000 advanced 2.5%.

The yield on 10-year Treasuries increased nine basis points to 4.33%. With improved risk sentiment, 16 issuers entered the US high-yield market. Oil prices rose after Trump announced plans to impose a 25% tariff on countries that buy Venezuelan crude and petrol.