Stocks Climb as Trump Puts Off Tariff Hike; Dollar Slightly Unsteady: Market Update By Robert Brand
Markets worldwide rallied on Monday after President Donald Trump pushed back a planned hike in tariffs on the European Union. The move gave investors some relief after days of uncertainty and tension.
European shares rebounded sharply, erasing last week’s losses triggered by Trump’s earlier threat to slap 50% tariffs on EU goods. US stock futures also climbed, with S&P 500 and Nasdaq 100 contracts rising over 1%. The dollar, meanwhile, remained near its lowest level in nearly two years, with investors losing confidence in the US currency.
Trump’s change of heart came after a phone call with European Commission President Ursula von der Leyen. The new tariff deadline is now set for July 9 instead of June 1, giving both sides more time to work out a deal. Von der Leyen posted on X that Europe is ready to talk but warned that a good deal will still take time.
The markets have been reacting sharply to Trump’s shifting trade policies. Investors say they’ve seen this pattern before—Trump makes bold threats, backtracks under pressure, and markets swing wildly in response. Jochen Stanzl, a market analyst, described it as the “Trump Pattern,” a cycle that adventurous traders now anticipate.
Still, not everyone is optimistic. Frederic Rozier, a portfolio manager, noted that while markets bounce back after every threat, the rebound seems weaker each time. Investors, he said, are getting tired of the back-and-forth. Even if a trade deal is reached, Rozier warned that European stocks may still take a hit.
Trump’s tariff threats last Friday went beyond Europe. He also warned that a 25% tax could hit smartphones from Apple and Samsung unless they shift production to the US.
Some European companies made headlines for other reasons. Thyssenkrupp shares soared over 8% after reports that the company’s CEO plans to restructure the business into a holding company to cut costs. Volvo also gained nearly 5% after announcing job cuts aimed at protecting profits.
Meanwhile, the dollar struggled. Bloomberg’s dollar index is nearing its lowest level since July 2023. Traders are backing off the dollar, with recent data showing they’ve reduced bearish bets to $12.4 billion from $16.5 billion the week before.
This week could bring more volatility. Nvidia is set to report its earnings on Wednesday. As a leader in the AI chip industry, its results are expected to influence the performance of growth stocks. On Friday, the US will release April’s core PCE inflation data—a key figure the Federal Reserve watches closely.
Adding to global worries, rising congestion at European ports hints that ongoing trade tensions may disrupt global shipping. That could drive up transportation costs and further pressure the world economy.
Market Snapshot (as of 4:54 p.m. NY time):
- Stocks: S&P 500 futures rose 1.3%, Nasdaq 100 gained 1.5%, and the MSCI World Index edged up 0.3%.
- Currencies: The Euro and British pound both rose 0.2%. The Japanese yen slipped slightly.
- Cryptos: Bitcoin climbed 1.7%, Ether rose 1.6%.
- Bonds: US 10-year yield dropped to 4.51%. UK gilt yields also declined.
- Commodities: Oil prices held steady, while gold dipped 0.4%.
