New York: U.S. stocks jumped higher on Monday, as U.S. President Donald Trump might scale back some of his broad tariff plans, potentially helping the United States avoid an economic slowdown from an extended trade war.
The Dow Jones Industrial Average climbed 597.97 points, or 1.42 percent, to 42,583.32. The S&P 500 gained 100.01 points, or 1.76 percent, to 5,767.57, while the Nasdaq Composite surged 404.54 points, or 2.27 percent, to 18,188.59.
Among the 11 primary S&P 500 sectors, 10 finished in positive territory. Consumer discretionary and communication services led the rally, rising 4.07 percent and 2.10 percent, respectively. Utilities was the sole decliner, edging down 0.01 percent. Service-sector activity exceeded expectations in March, while manufacturing underperformed, according to S&P Global’s report on Monday.
Despite lingering concerns about inflation and a possible recession ahead of Trump’s April 2 deadline for reciprocal tariffs, market sentiment improved on reports suggesting that the tariffs could be narrower in scope and that sector-specific measures might be delayed. Trump reinforced this outlook late Monday, stating that “a lot of countries” could receive tariff exemptions while confirming that tariffs on industries such as pharmaceuticals and autos would be introduced later rather than in early April.
“Market conditions are improving dramatically as the angst around reciprocal tariffs is somewhat diminishing. From a risk standpoint, escalation or retaliation has always been a concern, but should the administration come through with a more targeted and tactical strategy around tariff implementation, risks of a full-blown trade war are reduced,” said Charlie Ripley, senior investment strategist at Allianz Investment Management. “We see this as a potential lift to growth in the U.S., should reciprocal tariffs come in a more watered-down form.”
Meanwhile, Trump for the second time in five days called for lower rates from the Federal Reserve, turning up the pressure on the central bank. “I’d like to see the Fed lower interest rates,” he said Monday. “That’s just my opinion, because things are coming down. We have inflation under control. Tremendous amounts of money will be soon coming in from tariffs.”
Trump’s latest recommendations for the Federal Reserve follow its decision to keep interest rates unchanged for the second consecutive meeting on Wednesday, while maintaining its projection of two rate cuts later this year. The Fed adjusted its economic outlook, raising its inflation forecast while lowering its growth expectations. Fed Chair Jerome Powell attributed this shift in part to uncertainty surrounding Trump’s proposed wave of new tariffs, which would add to existing duties on China, Canada, and Mexico.
Tesla shares, which had declined for nine consecutive weeks, rebounded 11.93 percent, extending their Friday gains. Meta and Nvidia also climbed over 3 percent. The U.S. Treasury yields moved higher, with the 10-year Treasury note yield rising to 4.338 percent as of 4:08 p.m. EDT, up from 4.258 percent at Friday’s close.
