Stocks rally worldwide after Trump eases some tariffs on electronics for now

Stocks rose worldwide on Monday after Donald Trump relaxed some of his tariffs, for now at least, and as stress from within the US bond market seemed to be easing.

The S&P 500 climbed 0.8%, though trading was still shaky, and it briefly gave back all of its big early gain of 1.8%. The Dow Jones Industrial Average rose 312 points, or 0.8%, and the Nasdaq composite added 0.6%.

Apple and other technology companies helped lift Wall Street after the president said he was exempting smartphones, computers and other electronics from some of his stiff tariffs, which could ultimately more than double prices for US customers of products coming from China.

Such an exemption would mean US importers do not have to choose between passing on the higher costs to their customers or taking a hit to their own profits.

Apple climbed 2.2% and Dell Technologies rose 4%.

Car makers also rallied after Mr Trump suggested he may announce pauses on tariffs next for the motor industry. General Motors rose 3.5% and Ford Motor rallied 4.1%.

All told, the S&P 500 rose 42.61 points to 5,405.97. The Dow Jones Industrial Average gained 312.08 to 40,524.79, and the Nasdaq composite climbed 107.03 to 16,831.48.

Such relief may ultimately prove fleeting. Mr Trump’s tariff rollout has been full of fits and starts, and officials in his administration said this most recent exemption on electronics is only temporary.

That could keep uncertainty high for companies, which are trying to make long-term plans when conditions seem to change by the day.

Such uncertainty sent the US stock market last week to chaotic and historic swings, as investors struggled to catch up with Mr Trump’s moves on tariffs, which could ultimately lead to a recession if not reduced.

China’s commerce ministry welcomed the pause on electronics tariffs in a Sunday statement as a small step even as it called for the US to cancel the rest of its tariffs.

President Xi Jinping said on Monday that no one wins in a trade war as he kicked off a diplomatic tour of south-east Asia, hoping to present China as a force for stability in contrast with Mr Trump’s frenetic moves on tariffs.

Elsewhere on Wall Street, Goldman Sachs rose 1.9% after reporting a stronger profit for the latest quarter than expected. It joined other big banks in doing so, such as JPMorgan Chase and Morgan Stanley.

Perhaps more encouragingly for Wall Street, the bond market also showed signs of increasing calm. Treasury yields eased after their sudden rise last week, which seemed to rattle not only investors but also Mr Trump.

Treasury yields usually drop when fear is high in the market because US government bonds have historically been seen as some of the world’s safest investments, if not the safest. But last week, yields rose sharply for Treasury bonds in an usual move.

The value of the US dollar also fell against other currencies in another move suggesting investors may no longer see the US as the best place to keep their cash during moments of stress.

Mr Trump noted the moves in the bond market, which suggested investors “were getting a little queasy” after he announced a 90-day pause on many of his tariffs last week.

That he acted only after the bond market made its scary move, but not after US stock market began trembling, “reveals this administration’s Achilles heel”, according to Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management.

The yield on the 10-year Treasury eased back to 4.37%. It had jumped to 4.48% on Friday from 4.01% the week before.

Yields sank after the bond market got an encouraging update on expectations for inflation among US consumers. While US households raised their expectations for inflation in the year ahead, their expectations for inflation three and five years in the future were either unchanged or lower, according to a survey by the Federal Reserve Bank of New York.

That is potentially good news for the Federal Reserve, which hates to see fast-rising expectations for longer-term inflation. Such expectations could kick off a feedback loop that drives behaviour among consumers that only worsens inflation.

The value of the US dollar remained under pressure, slipping against the euro and the Japanese yen, while inching higher against the Canadian dollar.

In stock markets abroad, indexes climbed 2.4% in France, 2.9% in Germany, 1.2% in Japan and 1% in South Korea.

In China, stock indexes rose 2.4% in Hong Kong and 0.8% in Shanghai after the government reported that exports surged 12.4% in March from a year earlier in a last-minute flurry of activity as companies rushed to beat increases in US tariffs.