Edward McCarthy, a trader, is seen at work on the floor of the New York Stock Exchange on Tuesday, May 20, 2025. (AP Photo/Richard Drew)
Wall Street made a sharp rebound on Tuesday as U.S. stocks surged after President Donald Trump delayed a hefty tariff hike on European imports. This decision brought a wave of relief to investors, sending major indexes climbing and recovering from recent losses.
The S&P 500 shot up 2% in its first session since Trump announced on Sunday that the planned 50% tariffs on European goods would now begin on July 9 instead of June 1. This move gave markets a much-needed breather after weeks of uncertainty.
Following Trump’s announcement, the European Union’s top trade negotiator shared that discussions with U.S. officials were promising, and both sides were committed to reaching a deal before the new deadline. This hopeful tone helped restore confidence among investors, who escalating trade tensions.
The Dow Jones Industrial Average jumped 740 points (1.8%), and the tech-heavy Nasdaq soared 2.5%. These gains wiped out Friday’s losses when markets had plunged following Trump’s tariff threat on the EU, including key economies like France and Germany.
Analysts see this delay as a positive signal that a resolution might be in sight. A trade deal with the EU, one of America’s biggest partners, could ease fears of a recession and keep global trade flowing. Earlier this month, Trump had also put a hold on tariffs aimed at China, which triggered another stock market rally.
Still, experts urge caution. Jean Boivin from BlackRock Investment Institute noted that policy shifts driven by economic strain are more impactful than promises alone. While the S&P 500 is now within 3.6% of its all-time high, the whiplash from tariff news has made many investors wary.
The uncertainty has already started affecting spending habits, with some Americans and businesses holding back on purchases and investments. Consumer surveys show growing concern over inflation and the country’s economic outlook due to trade policies.
However, Tuesday brought encouraging news. A new report from the Conference Board revealed that consumer confidence rose more than expected in May, marking its first increase in six months. Expectations for income, job prospects, and business conditions all improved—especially after Trump announced a pause on China tariffs. The boost in optimism was seen across all age and income groups.
Among individual stocks, Nvidia gained 3.2%, riding high ahead of its earnings report on Wednesday. As part of the “Magnificent Seven” tech giants, Nvidia’s performance often sets the tone for the market. Its recent surge has been fueled by the booming demand for artificial intelligence, though some critics warn the stock may be overpriced.
Salesforce also made headlines, rising 1.5% after announcing plans to acquire Informatica for $8 billion in an all-stock deal. Informatica’s shares climbed 6% following the news.
About 93% of stocks in the S&P 500 closed higher, signalling broad market strength. One of the few exceptions was AutoZone, which slipped 3.7% after reporting earnings that missed Wall Street’s expectations. While revenue exceeded forecasts, foreign currency shifts hurt its international operations.
Overall, the S&P 500 rose 118.72 points to 5,921.54. The Dow climbed 740.58 points to 42,343.65, and the Nasdaq added 461.96 points to close at 19,199.16.
In the bond market, the yield on the 10-year Treasury dropped to 4.44% from 4.51%, helping reduce pressure on stocks. This drop followed a period of rising yields, especially in Japan, where a government bond auction had failed to attract many buyers. Later, a move by Japan’s finance ministry reassured investors, helping to stabilize the market.
Meanwhile, overseas stock markets saw mixed results. European indexes ended mostly higher, while Asia’s markets had a more uneven day.
