TLDR
- U.S. stocks gained Tuesday after Trump delayed EU tariffs until July 9, with the S&P 500 up 2.05% and Nasdaq climbing 2.47%
- Consumer confidence improved in May, snapping five months of decline as trade tensions eased between Washington and Beijing
- All major indices posted strong gains with the Dow rising 1.78% to 42,343.65 following Memorial Day holiday
- Treasury yields fell, with 30-year bonds dropping 8 basis points amid reports Japan may cut super-long bond issuance
- Markets now focus on Nvidia earnings Wednesday, expecting 66% revenue jump, as next major catalyst for tech stocks
U.S. stock markets posted strong gains Tuesday as President Trump paused threatened tariffs on European goods until July 9. The decision came after a weekend call with European Commission President Ursula von der Leyen.
The S&P 500 gained 2.05% to 5,921.54, while the Nasdaq Composite climbed 2.47% to 19,199.16. The Dow Jones Industrial Average rose 1.78% to 42,343.65.
All 11 sectors of the S&P 500 finished higher. Consumer discretionary and technology stocks led the gains following the Memorial Day holiday.
European markets also advanced, with the STOXX index rising 0.33%. UK shares climbed 0.69% after returning from a holiday at the start of the week.
Consumer confidence data showed improvement in May after five straight months of decline. The rebound came as trade tensions eased between Washington and Beijing.
Daniel Genter from Genter Capital Management said the rally reflects growing confidence that massive tariffs won’t interrupt the U.S. economy. He described Trump’s tariff threats as negotiation tactics with real teeth rather than empty bluffs.
Treasury Yields Drop on Japan Bond News
Treasury yields fell across the board Tuesday. The 30-year yield dropped 8 basis points to 4.9572%, marking the biggest one-day decline since mid-April.
The move followed reports that Japan may trim issuance of super-long bonds after recent sharp rises in yields. Japanese 30-year debt yields fell nearly 20 basis points on the news.
The 30-year Treasury yields remain just below 5%, near their highest levels since October 2023. These long-term rates were at the center of April’s market selloff following Trump’s initial tariff announcements.
Wasif Latif from Sarmaya Partners said markets welcomed both the EU tariff delay and Japan’s bond issuance decision. The combination helped improve the overall yield story for investors.
Nvidia Earnings Take Center Stage
Investors now turn their attention to Nvidia’s first-quarter earnings report due Wednesday after market close. The chipmaker is expected to report a 66% jump in revenue.
Nvidia shares gained 3.2% Tuesday in anticipation of the results. James Demmert from Main Street Research called the earnings report pivotal for both Nvidia and the broader stock market.
The results could help investors focus on artificial intelligence developments rather than political headlines from Washington. Nvidia’s performance has become a key driver for technology sector sentiment.
Federal Reserve policymakers are scheduled to give several speeches this week. Friday’s core PCE price index data will also provide clues about future interest rate decisions.
The dollar strengthened against major currencies including the yen and euro. Oil prices fell on supply concerns as Iranian and U.S. delegations made progress in talks.
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