Market Rallies as Tariff Policies Shift Under Trump Administration

The S&P 500 Index ($SPX) (SPY) is up +1.73%, while the Dow Jones Industrials Index ($DOWI) (DIA) has increased by +1.39%. The Nasdaq 100 Index ($IUXX) (QQQ) sees a gain of +1.88%. Additionally, June E-mini S&P futures (ESM25) are up +1.71%, and June E-mini Nasdaq futures (NQM25) are rising +1.82%.

Stock indexes are climbing today as market participants hope that President Trump is taking a friendlier approach to tariff policies. Last Friday, he announced a temporary exemption for consumer electronics from reciprocal tariffs and the baseline 10% global tariffs. However, a 20% tariff will still be imposed on electronics exported from China. With this news, chip manufacturers and technology stocks have surged, pushing the overall market higher.

Last Wednesday, President Trump revealed a 90-day pause on higher reciprocal tariffs affecting 56 nations. Nonetheless, the new 10% baseline tariff applies to nearly all countries. Meanwhile, on Thursday, the EU announced a similar delay of 90 days for implementing 25% tariffs on $21 billion worth of US goods imported into Europe.

For several weeks, stocks have faced pressure due to concerns that US tariffs might dampen economic growth and corporate earnings. On March 4, Trump imposed 25% tariffs on Canadian and Mexican goods while doubling tariffs on Chinese imports from 10% to 20%. Following this, on April 2, he signed a proclamation introducing a 25% tariff on US auto imports, targeting vehicles assembled outside the US initially and extending to automobile parts by May 3. Trump referred to these tariffs as “permanent,” disregarding negotiations for exceptions. Additionally, a 10% baseline tariff took effect on April 5, and last Friday, China raised its tariffs on all US goods to 125% from 84%, a direct response to the US increasing its tariffs on Chinese goods to 145%.

The ongoing tariff disputes are negatively impacting the dollar while simultaneously boosting gold prices. Last Friday, the dollar index plummeted to a three-year low, while gold soared to an all-time high. Market concerns about the ramifications of US trade policies have caused consumer confidence to drop significantly. Many companies are now postponing their capital spending plans, a trend that could exacerbate GDP growth slowdowns. Furthermore, as the US employs tariffs as a political tool, the dollar is experiencing a confidence crisis, undermining its status as a reserve currency and leading some foreign investors to offload their dollar holdings.

This week, marked by the holiday season, will keep market attention on US trade policy developments. On Wednesday, expectations for March retail sales are set at a +1.4% month-over-month increase, with retail sales excluding autos anticipated to rise by +0.4%. Also, March manufacturing production is expected to increase by +0.3% month-over-month. Fed Chair Powell will speak before the Economic Club of Chicago regarding the economic outlook on Wednesday. Additionally, March housing starts are forecasted to decline by -5.7% month-over-month, resulting in a total of 1.416 million, while building permits are expected to drop by -0.6% month-over-month to 1.450 million.

Currently, the markets assign a 21% probability for a -25 basis points rate cut following the FOMC meeting on May 6-7.

The Q1 earnings reporting season commenced last Friday with significant results from US banks. According to data from Bloomberg Intelligence, the consensus for year-over-year Q1 earnings growth for S&P 500 companies is projected at +6.7%, a decline from the +11.1% expectation noted in early November. Moreover, full-year 2025 corporate profits for the S&P 500 are forecasted to rise by +9.4%, down from the previously anticipated +12.5% in January.

Internationally, Stock markets are also trending upward. The Euro Stoxx 50 has climbed +2.78%. The Shanghai Composite Index in China has reached a one-week high, closing up +0.76%. Japan’s Nikkei 225 has also increased, finishing +1.18% higher.

Interest Rates

June 10-year T-notes (ZNM25) have risen by +16 ticks, with the yield decreasing -6.9 basis points to 4.421%. Today’s increase in T-notes can be attributed to eased inflation worries following Trump’s exemption for consumer electronics from reciprocal tariffs late last week. Furthermore, T-notes benefit from today’s strong performance in European government bonds. Reports indicated that Boston Fed President Collins reiterated that the Fed stands ready to support market stabilization if necessary.

European bond yields are experiencing downward movement today, with the 10-year German bund yield down -4.1 basis points to 2.529%. The 10-year UK gilt yield has decreased by -8.0 basis points to 4.673%.

Swaps indicate a 96% likelihood of a -25 basis points rate cut by the ECB during the upcoming April 17 policy meeting.

US Stock Movers

The “Magnificent Seven” stocks are driving today’s broader market gain. Apple (AAPL) has increased by more than +3%, while Alphabet (GOOGL) is up more than +2%. Nvidia (NVDA) is up more than +1%, Microsoft (MSFT) rises +0.63%, and Tesla (TSLA) shows a +0.52% gain.

In technology and chip manufacturing, stocks are rallying today in response to Trump’s temporary pause on reciprocal tariffs for consumer electronics. Companies such as Micron Technology (MU), Western Digital (WDC), and Seagate Technology Solutions (STX) have experienced increases of more than +4%. Texas Instruments (TXN) has also risen by more than +3%. Additional gainers in this sector include Advanced Micro Devices (AMD), ARM Holdings Plc (ARM), ON Semiconductor Corp (ON), and Microchip Technology (MCHP), all up over +2%. Lam Research (LRCX), NXP Semiconductors NV (NXPI), and GlobalFoundries (GFS) have upswings of more than +1%.

Computer manufacturers and electronic retailers are also benefitting from tariff exemptions. Dell Technologies (DELL) has surged upwards of +7%, while Best Buy (BBY) has risen more than +4%, and HP Inc (HPQ) is up over +3%.

Palantir Technologies (PLTR) leads significant gainers in both the S&P 500 and Nasdaq 100, rising more than +8% following NATO’s acquisition of an AI-powered military system from the company.

PDD Holdings (PDD) has seen an increase of over +7% due to the positive tariff news regarding consumer electronics. Intel (INTC) is up by more than +5% after announcing nearing a deal to divest part of its programmable chips division, Altera, to Silver Lake Management. Atlassian Corp (TEAM) has risen above +3% following an upgrade to outperform by Baird, with a price target set at $255. DuPont de Nemours (DD) is up more than +2% after KeyBanc Capital Markets upgraded it to overweight. Freeport-McMoRan (FCX) is also up more than +2% following an HSBC upgrade to buy from hold with a price target of $40.

Norwegian Cruise Line Holdings Ltd (NCLH) has seen an increase of more than +2% after CFRA upgraded the stock to buy. However, DaVita (DVA) is down over -3%, leading the S&P 500’s losses after reporting a ransomware incident affecting its network.

Defensive healthcare stocks are declining due to the overall market’s strength. UnitedHealth Group (UNH) is down more than -2%, while Humana (HUM), Molina Healthcare (MOH), and Centene (CNC) are all down by more than -1%.

Hotel stocks are facing downward pressure following downgrades. Hyatt Hotels (H) is down more than -2% after a downgrade from Goldman Sachs to sell. Hilton Worldwide Holdings (HLT) and Marriott International (MAR) have also reported losses following similar downgrades.

Earnings Reports (4/14/2025)

Notable earnings expected include Applied Digital Corp (APLD), FB Financial Corp (FBK), Goldman Sachs Group Inc/The (GS), M&T Bank Corp (MTB), and Pinnacle Financial Partners Inc (PNFP).

On the date of publication,

Rich Asplund

did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy

here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.