TLDR
- U.S. stock futures rise over 1% as Trump delays EU tariff hikes from June 1 to July 9
- EU agrees to fast-track trade negotiations with the U.S. to avoid 50% tariffs
- Dow futures up 1.3%, S&P 500 futures gain 1.6%, Nasdaq 100 leads with 1.7% increase
- Treasury yields fall and dollar strengthens on improved trade outlook
- Nvidia earnings on Wednesday will be closely watched for AI trade direction
U.S. stock futures opened sharply higher Tuesday morning after President Trump delayed planned tariff increases on European Union imports. The move came as both sides agreed to accelerate trade negotiations.
Dow Jones Industrial Average futures climbed 1.3%, adding over 550 points in pre-market trading. S&P 500 futures gained 1.6% while Nasdaq 100 contracts led the advance with a 1.7% jump.
The rally followed Trump’s Sunday announcement postponing 50% tariffs on EU products. The tariffs were originally set to take effect June 1 but will now be delayed until July 9.
This delay provides breathing room for trade discussions between the two economic powers. The European Commission confirmed Monday that both sides would fast-track negotiations during this extended timeline.
“The EU tariff reprieve until July 9 is an important step in the overall resolution of this trade situation,” said Robert Ruggirello, chief investment officer at Brave Eagle Wealth Management. He noted the move increases chances for successful trade deals.
Markets had been on edge about potential trade conflicts between the U.S. and EU. The 50% tariff rate would have represented a sharp increase from current levels.
Treasury Markets React to Trade News
The benchmark 10-year Treasury note yield dropped to 4.46% early Tuesday. This decline from the previous week reflects improved investor sentiment about trade relations.
The dollar also strengthened against other currencies. Currency movements often reflect changing expectations about economic policy and international relations.
Investors are now focusing on whether the July 9 deadline will provide enough time for meaningful progress. Trade negotiations between major economies typically require extensive discussions on complex issues.
Key Earnings Reports This Week
Market attention will shift to corporate earnings results throughout the week. Nvidia reports first-quarter results Wednesday in what analysts consider the quarter’s most important earnings announcement.
The chip maker’s performance and guidance will provide insights into artificial intelligence demand. Investors have closely watched AI-related stocks for signs of continued growth.
Software company Salesforce also reports Wednesday results. Personal computer makers HP Inc. and Dell Technologies will announce earnings Wednesday and Thursday respectively.
Other companies reporting this week include Okta, Macy’s, and Costco. These results will help investors gauge consumer spending and business technology trends.
Economic data releases are also scheduled throughout the week. Reports on durable goods orders, housing data, and consumer confidence will provide additional market direction.
Federal Reserve officials are expected to maintain current interest rate policy. The central bank has signaled a steady approach to monetary policy in recent communications.
Trump’s tax legislation also remains in focus after narrowly passing the House last week. The bill now moves to the Senate for consideration.
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