Stocks jump amid signs Trump could scale back tariffs
Stocks jumped on Monday on reports that Trump administration tariffs set to take effect on April 2 could be narrower than previously expected.
The S&P 500 rose 100 points, or 1.8%, to close at 5,768. the Dow Jones Industrial Average, surged 598 points, or 1.4%, and the Nasdaq Composite ended the day up 405 points, or 2.3%.
A White House official told AFP that planned levies on the automobile, semiconductor and other industries "may or may not happen April 2," noting that the situation remained fluid.
"The market was primed to respond well if the administration pulled back on some of the tariff threats or even provided off ramps for the tensions, and that's kind of what we're seeing here," said Ross Mayfield, investment strategist at Baird.
So-called reciprocal tariffs President Trump threatened to slap on other countries to match what they charge on U.S. imports are still expected to take effect, the official said. Mr. Trump on Monday also threatened 25% tariffs against any nation that continues to buy oil or gas from Venezuela as of April 2. On social media, he said the U.S. will impose a "secondary" tariff on the country because it is home to a transnational gang known as Tren de Aragua..
The Trump administration has deported immigrants it claims belong to the gang, which Mr. Trump has labeled a foreign terrorist group and wartime enemy.
Markets clinging to hope
Financial markets have slumped this year on concerns that the Trump administration's aggressive use of tariffs could torpedo U.S. economic growth and boost inflation.
"Markets opened in a bit of a risk-on mood overnight. U.S. equity index futures gained from the outset, finding support from recent reports that President Trump's promised tariffs may be more targeted than he has previously stated," said John Canavan, lead U.S. analyst with Oxford Economics.
The S&P 500 rose 0.5% last week, the index's first weekly gain since Feb. 14, although it remains down nearly 2% on the year. The Nasdaq has slid 5.8% in 2025 over concerns the huge technology companies that dominate the index could get caught in the crossfire between U.S. tariffs and countermeasures by other countries. The blue-chip Dow is essentially flat this year.
Citing the potential impact of tariffs, the Federal Reserve earlier this month lowered its outlook for economic growth to 1.7%, down from its December forecast of 2.1%, while forecasting hotter inflation this year. A Federal Reserve Bank of Atlanta model that assesses current economic conditions forecasts growth in the first three months of the year at -1.8%.
What investors are watching this week
This week's calendar is relatively light on events likely to move markets. But on Tuesday, investors will zero in on a closely watched gauge of consumer confidence. The Conference Board, which represents large U.S. companies, in February reported the sharpest decline in its consumer sentiment index in more than four years.
Analysts with investment research firm Wrightson-ICAP expect the Conference Board index in March to show a fourth straight monthly decline in consumer confidence.
"We look for a 5-point decline to 93, which would bring the cumulative decline since November to roughly 20 points and would be the weakest reading in more than four years," they wrote in a research note.
Spending by Americans accounts for roughly two-thirds of economic activity, so rising pessimism among consumers and businesses can weigh on growth.
Wall Street on Thursday will also scrutinize the latest jobless claims data for signs that mass federal layoffs ordered by the Trump administration are affecting the labor market.
