President Trump’s decision to postpone new levies on the European Union calmed jittery investors — and sent the markets soaring on Tuesday.
The Dow Jones Industrial Average spiked 740 points, or 1.8%, while S&P 500 climbed 2.1%. The Nasdaq Composite, an index dominated by tech stocks, jumped 2.5%, or 462 points.
The rebound came after Friday’s slide following Trump’s threat to impose a 50% tariff on EU imports within days, while also warning that foreign-manufactured iPhones could face tariffs.
But early Tuesday morning, Trump confirmed the proposed duties on the EU would be delayed until July 9 after a weekend call with European Commission President Ursula von der Leyen.
“This is a positive event, and I hope that they will, FINALLY, like my same demand to China, open up the European Nations for Trade with the United States of America,” Trump wrote in a post on Truth Social.
EU trade chief Maroš Šefčovič said the bloc was committed to avoiding “the mutual pain of tariffs” and would accelerate talks with Washington in the coming weeks.
The White House has not publicly commented on the contents of the call between Trump and von der Leyen, though insiders say both sides are seeking a temporary framework to de-escalate tensions.
“I think [it] just gives people some confidence that perhaps we’re moving in the right direction finally,” Will Rhind, chief executive of investment firm GraniteShares, told Yahoo Finance.
The S&P 500 is now within 5% of its record closing high reached on Feb. 19, having plunged as much as 18.9% below that level in the wake of the administration’s erratic tariff announcements.
“Investors have kind of figured Trump out a little bit,” said Paul Nolte, senior wealth adviser and market strategist at Murphy and Sylvest in Elmhurst, Ill.
“He’s like the poker player at the table that you know is making some bets and then when pressed by the other players at the table, he folds.”
The markets also got a boost from a bump in consumer confidence, which jumped in May for the first time in five months after Trump reached a temporary truce with China to lower tariff rates for 90 days, according to data released by the Conference Board on Tuesday.
But experts warned that it seems market volatility is here to stay as long as Trump continues his back-and-forth tariff news.
Some investors, after picking up on Trump’s ever-changing stream of tariff news, have invented a so-called “TACO” trade – an acronym for “Trump Always Chickens Out” – to deal with market fluctuations.
“Once he delivers bad news, investors are buying those stocks when they are beaten down waiting for him to chicken out and watching those stocks rebound in value,” Ted Jenkin, president of Exit Stage Left Advisors, told The Post.
Chipmaker Nvidia is set to report earnings on Wednesday, with expectations high after its recent AI-fueled rally. Several other S&P 500 companies are also due to report this week, providing fresh insight into the health of corporate earnings.
Also Wednesday, the Federal Reserve will release minutes from its latest policy meeting, which are expected to shed light on its inflation outlook and rate path. The central bank’s preferred inflation metric — the core PCE price index for April — is due later in the week.
Speaking Tuesday, Minneapolis Fed President Neel Kashkari called for caution in adjusting monetary policy.
“It makes sense to keep rates on hold until we have more clarity on the global trade outlook,” Kashkari said.
