New York (AP) – Wall Street’s roller coaster ride, influenced by President Donald Trump’s trade policies, saw an upswing on Tuesday, attributed to his decision to delay tariffs on the European Union.
The S&P 500 surged by 2% in its first session since Trump announced on Sunday a 50% tariff on EU goods set to take effect from June 1st to July 9th. The EU’s chief trade negotiator later noted on Monday the positive nature of a “good phone call.” Officials from both Trump’s administration and the EU emphasize their firm commitment to finalizing a trade agreement by July 9th.
Trader Thomas Ferigno, left, and specialist James Denaro work on the floor of the New York Stock Exchange on Tuesday, May 27, 2025 (AP Photo/Richard Drew)
The Dow Jones Industrial Average surged 740 points (1.8%), while the Nasdaq Composite gained 2.5%. These indices more than recovered their losses from last Friday’s roller coaster ride following Trump’s announcement of tariffs affecting 25 other countries, including France, Germany, and the EU.
The ongoing discussions provide hope that the U.S. can continue to lead global trade while solidifying agreements with key partners to avert a recession. Earlier this month, Trump also announced a similar suspension of his stringent tariffs on Chinese imports, leading to an even more significant rally on Wall Street at that time.
“We prioritize actions over words,” remarked Jean Boyvin and other analysts at the Blackrock Investment Institute, noting that “economic constraints often lead to the rollback of policies.”
Nevertheless, concerns linger on Wall Street. Despite the S&P 500’s recovery to within 3.6% of its all-time high after dropping nearly 20% last month, worries about economic uncertainty prevail.
The anxiety surrounding persistent tariffs may hinder economic growth by discouraging U.S. households and businesses from spending and investing. Research indicates that consumers are increasingly concerned about the economic outlook and the trajectory of inflation due to tariffs.
However, a sense of optimism prevailed on Tuesday, as stock market gains accelerated following a report from the Conference Board suggesting improved consumer confidence that exceeded economists’ expectations in May.
This marked the first uptick in six months, with significant improvements in consumer expectations for short-term income, the business environment, and job prospects, albeit generally below pre-recession levels. Approximately half of the respondents took the survey after Trump announced the suspension of some tariffs on China.
The Conference Board noted that the surge in confidence was widespread across various age and income demographics.
On Wall Street, Nvidia was a standout performer, climbing 3.2%, following its earnings report scheduled for Wednesday. The stock is seen as a key player among the “magnificent Seven” tech giants dominating the market.
Trader Robert Alcielo, right, working on the floors at the New York Stock Exchange on Tuesday, May 27, 2025 (AP Photo/Richard Drew)
Nvidia is capitalizing on the surge in growth created by excitement over artificial intelligence technology, though it has faced criticism regarding its high stock valuation.
Informatica saw a 6% increase following Salesforce’s announcement of its acquisition of an AI-driven cloud data management firm. The deal is valued at approximately $8 billion. Additionally, Salesforce reported a 1.5% increase.
This growth was part of a broader positive trend throughout the U.S. stock market, with 93% of S&P 500 stocks making gains.
One exception was Autozone, which experienced a 3.7% decline after reporting mixed performance for the three months ending May 10th. Revenue growth exceeded expectations, but profits fell short of analyst forecasts.
CEO Phil Daniel indicated that both DIY and commercial operations performed well domestically, but fluctuating foreign currency values would put pressure on retailers’ operations outside the U.S.
The S&P 500 rose 118.72 points to 5,921.54. The Dow Jones Industrial Average increased by 740.58 to 42,343.65, while the NASDAQ Composite gained 461.96 to reach 19,199.16.
In the bond market, Treasury yields declined to 4.44%, down from 4.51% on Friday, alleviating some pressure on the stock market. Despite rising last week, concerns regarding the rapid increase in U.S. government debt remain.
In Japan, specifically, bond yields have risen across developed countries, with recent long-term bond auctions drawing minimal interest. Analysts noted, however, that worries eased somewhat after the Japanese Ministry of Finance surveyed investors, signaling efforts to stabilize the market.
In international markets, European indices showed overall gains, while Asian indices presented mixed results.
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AP business writers Matt Ott and Elaine Kurtenbach contributed.
Source: apnews.com