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New York (CNN) — US stocks rose Monday as traders rallied on the Trump administration’s exemption for tariffs on smartphones, computers and various electronics imported from China.
The Dow rose 312 points, or 0.78%. The broader S&P 500 rose 0.79%. The tech-heavy Nasdaq Composite gained 0.64%.
All three major indexes closed higher after a choppy day of trading. Stock indexes had opened higher before giving up some gains across the morning as a rally in tech stocks lost some steam. The Nasdaq rose as much as 2.4% in the morning before fluctuating between gains and losses midday and then gradually gaining. The Dow and the S&P 500 briefly dipped into the red midday before gaining in the afternoon.
US stock futures had gained over the weekend after investors realized on Saturday that the Trump administration issued tariff exemptions for electronics imported from China, according to a US Customs and Border Protection notice posted late Friday.
The exemptions come after President Donald Trump on Wednesday imposed a tariff rate of 145% on imports from China. However, the exemptions do not apply to the 20% tariff on imports from China over the country’s role in the fentanyl trade. Apple (AAPL) rallied 2.2% Monday.
While stocks gained, confusion lingers around the trade war with China: Commerce Secretary Howard Lutnick on Sunday said the exemptions for electronics are only a temporary reprieve. Those products will face separate levies, according to Lutnick.
“(Electronics are) exempt from the reciprocal tariffs, but they’re included in the semiconductor tariffs, which are coming in probably a month or two,” Lutnick told ABC News on Sunday.
In another back-and-forth, Trump said Monday he is considering a short-term tariff exemption for automakers. Trump’s 25% tariff on vehicles went into effect April 3 and tariffs on auto parts are slated to go into effect no later than May 3. Ford (F), Stellantis (STLA) and General Motors (GM) all surged more than 3% after Trump’s comments.
“I’m looking at something to help some of the car companies where they’re switching to parts that were made in Canada, Mexico and other places and they need a little bit more time,” Trump said during remarks at the White House. “They’re going to make them here, but they need a little bit more time.”
The gains in US stocks followed rallies overseas. In Europe, the benchmark STOXX 600 gained 2.7%, while Germany’s DAX rose 2.85%. In Asia, Japan’s Nikkei 225 gained 1.2%, while Hong Kong’s Hang Seng rose 2.4%. Taiwan’s benchmark index edged lower by 0.08%, an outlier amid widespread gains.
The gains in US stocks on Monday also came after new survey data from the New York Federal Reserve showed mounting pessimism among consumers about the short-term outlook for the economy. The New York Fed survey on Monday showed a sharp increase in respondents’ near-term inflation expectations, which jumped 0.5 percentage points to 3.6% — the highest reading in a year and a half.
US stocks are coming off a wild two weeks. Trump’s rollout of his so-called “reciprocal tariffs” and subsequent 90-day pause on most “reciprocal” tariffs has sent US stocks on a roller coaster.
The S&P 500 fell 9% across the first week of April, its worst week since 2020, before rallying 5.7% the second week of April, its best week since 2023. The stock market on Wednesday posted its third-biggest single-day gain in modern history after Trump announced a 90-day pause on most “reciprocal” tariffs. Despite the surge, the S&P 500 is still trading below its closing price on April 2, just before Trump initially announced the reciprocal tariffs.
“The situation remains fluid, amid continuous twists and turns in developments since the ‘Liberation Day’ announcement less than two weeks ago,” analysts at UBS said in a Monday note. “But given the 90-day pause on ‘reciprocal’ tariffs and the latest electronics tariff reprieve, we expect the recovery in tech shares to continue.”
Tariffs dampen Wall Street’s outlook for the economy
Wall Street will look to continue a rally, although uncertainty is abound. The lack of clarity about Trump’s trade policy has kept traders in the dark about how to best position their investments — and raised concerns about US economic growth.
“While any delay of tariffs is beneficial on the margin, it is not the same as their removal,” analysts at Morgan Stanley said in a Friday note. “History suggests that elevated and prolonged uncertainty that weighs on business confidence can have detrimental effects on business spending and hiring.”
Goldman Sachs CEO David Solomon said in an earnings press release Monday that the climate is a “markedly different operating environment than earlier this year.”
“The prospect of a recession has increased with growing indications that economic activity is slowing down,” Solomon said on a call with analysts. “Our clients, including corporate CEOs and institutional investors, are concerned by the significant near-term and longer-term uncertainty that has constrained their ability to make important decisions.”
Billionaire Ray Dalio over the weekend said Trump’s tariffs have helped push the US close to a recession — or perhaps even “something worse.”
“Right now, we are at a decision-making point and very close to a recession,” the hedge fund manager told NBC News Sunday. “And I’m worried about something worse than a recession if this isn’t handled well.”
Analysts at Citi on Friday lowered their year-end target for the S&P 500 to 5,800 from 6,500, joining a group of Wall Street giants in cutting their forecasts for corporate earnings and growth this year amid an uncertain tariff environment.
“No doubt, the goldilocks sentiment in place entering this year has given way to abject uncertainty,” analysts at Citi said in a Friday note.
A major focus for investors this week will be the Treasury market, which is coming off a week so abnormally volatile that it spooked the White House and raised questions about whether US government debt is losing its status as a safe haven.
US Treasuries gained slightly on Monday and were relatively stable after broadly slumping last week. The yield on the 10-year Treasury note hovered around 4.38% Monday morning, after spiking above 4.5% on Friday. Yields and bond prices trade in opposite directions.
The US dollar index, which measures the dollar’s strength against six foreign currencies, slid 0.4% on Monday and is coming off its biggest single-week decline since 2022. The dollar has broadly weakened this year amid concerns about waning investor confidence in the United States.
US oil on Monday settled 3 cents higher at $61.53 a barrel. Brent crude, the global benchmark, settled 12 cents higher at $64.88 a barrel. Oil largely held steady after OPEC in a monthly report slightly lowered its forecast for global oil demand growth this year, citing the impact of tariffs.
Meanwhile, gold was down 0.8% on Monday after surpassing a record high $3,200 a troy ounce on Friday. The yellow metal has soared more than 21% this year as investors flock to safe havens. Analysts at Goldman Sachs on Friday raised their year-end price forecast for gold to $3,700, underpinning the heightened demand for bullion amid economic uncertainty.
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