NEW YORK (AP) — Wall Street’s roller-coaster ride created by President Donald Trump’s trade policies whipped back upward on Tuesday, this time because of a delay for his tariffs on the European Union.
The S&P 500 leaped 2% in its first trading since Trump said Sunday that the United States will delay a 50% tariff on goods coming from the European Union until July 9 from June 1. The European Union’s chief trade negotiator later said on Monday that he had “good calls” with Trump officials and the EU was “fully committed” to reaching a trade deal by July 9.
The Dow Jones Industrial Average jumped 740 points, or 1.8%, and the Nasdaq composite rallied 2.5%. They more than recovered their losses from Friday, when Wall Street’s roller coaster dropped after Trump announced the tariffs on France, Germany and the other 25 countries represented by the European Union.
Such talks give hopes that the United States can reach a deal with one of its largest trading partners that would keep global commerce moving and avoid a possible recession. Trump declared a similar pause on his stiff tariffs for products coming from China earlier this month, which launched an even bigger rally on Wall Street at the time.
“We focus on actions over words,” Jean Boivin and other strategists at BlackRock Investment Institute said, “as economic constraints spur policy rollbacks.”
Caution still remains on Wall Street, of course, even if the S&P 500 has climbed back within 3.6% of its record after falling roughly 20% below the mark last month.
A worry is that all the uncertainty caused by on-again-off-again tariffs could damage the economy by pushing U.S. households and businesses to freeze their spending and investments. Surveys have already shown U.S. consumers are feeling worse about the economy’s prospects and where inflation may be heading because of tariffs.
On Tuesday, though, optimism ruled. The stock market’s gains accelerated after a report released by the Conference Board said confidence among U.S. consumers improved by more in May than economists expected.
It was the first increase in six months, and consumers’ expectations for income, business and the job market in the short term jumped sharply, though it still remains below the level that typically signals a recession ahead. About half the survey results came after Trump paused some of his tariffs on China.
The rise in confidence was widespread, covering different age and income groups, according to the Conference Board.
On Wall Street, Nvidia rallied 3.2% and was the strongest single force driving the S&P 500 higher ahead of its profit report coming on Wednesday. It’s the last to report this quarter among the “Magnificent Seven” Big Tech companies that have grown so large that their stock movements dominate the rest of the market.
