US stocks gain on easing tension with EU, consumer confidence
US stocks gained after a long holiday weekend on signs of cooling trade tensions between the US and the European Union, rebounding consumer confidence and falling bond yields.
The S&P 500 Index rose 1.7% at 11:50 a.m. in New York, putting the benchmark on track to bounce back from last week’s four-session losing streak. Meanwhile, the technology-heavy Nasdaq 100 Index climbed 2.0%.
Some of the risk-on mood emerged after President Donald Trump extended a deadline on tariffs on the EU until July 9, but the market also got a boost from a fixed-income rally after hints that Japan may be prepared to adjust debt issuance following a bond rout there.
“Most of the bounce is likely driven by the de-escalation of EU tariff threat over the weekend, but I also think the easing in Treasury yields is helping, especially given the sharp moves to the upside last week,” said Kevin Gordon, senior investment strategist at Charles Schwab & Co. “Despite all of the tariff headline volatility, the good news up until this point is that the hard economic data have remained resilient.”
Trump told reporters on Sunday that he had a “very nice call” with European Commission President Ursula von der Leyen and agreed to move the date. Von der Leyen said in a post earlier on Sunday that Europe was ready to “advance talks swiftly and decisively,” but in order to reach a “good deal” will need “time until July 9.”
“The EU tariff reprieve until July 9 is an important step in the overall resolution of this trade situation, as it increases the chances that trade deals will continue to come to fruition, which is the exact messaging that the market is hoping for,” said Robert Ruggirello, chief investment officer at Brave Eagle Wealth Management.
While there’s no guarantee a deal will be reached between the two sides over the next five to six weeks, Miller Tabak’s Matt Maley said it was enough to provide relief following last week’s decline.
Outside of new wrinkles in Trump’s trade fight, US consumer confidence rebounded sharply in Mayas the outlook for the economy and labor market improved amid the tariff truce. However, LPL Financial’s Jeffrey Roach warned this may only be temporary.
“For now, trade policy is the main contributor to volatility in capital markets and it appears these conditions will continue in the near term,” Roach said. “Unmoored inflation expectations will likely keep the Fed on hold for longer than originally anticipated.”
Investors will now look to meeting minutes from the Federal Open Market Committee are due on Wednesday, while initial jobless claims and pending home sales come on Thursday.
Also on the agenda for this week are long-awaited first-quarter earnings for Nvidia Corp., which will report on Wednesday after the market close. The chipmaker is the last of the so-called Magnificent Seven mega-cap tech names to report this quarter. Shares in the chipmaker are currently up 2.8%.
“Nvidia’s next earnings report will be important in determining whether or not the stock can break out of the relatively narrow trading range that it’s been in over the past 10 months,” Ruggirello said. “While Nvidia’s valuation is once again rich, as it’s recovered almost all of its tariff-driven decline, the stock needs a catalyst to break out to new record highs.”
Elsewhere in single stocks, Apple Inc. rebounded as the market continued to digest the impact of Trump’s tariff policies. Advanced Micro Devices Inc. rose after HSBC upgraded the stock to hold from reduce, citing the recent re-rating on a deal with Saudi Arabia as well as tariff de-escalation.
Meanwhile, PDD Holdings Inc. slumped after the Temu owner quarterly sales and net profit missed estimates as trade tensions between Beijing and Washington took a toll on its business. Rocket Pharmaceuticals Inc. plummeted after reporting a patient died following an unexpected serious adverse event involving clinical complications related to capillary leak syndrome.