Stocks soared higher on Tuesday as President Donald Trump's latest tariff update over the weekend improved sentiment across a still cautious market. Investors were also encouraged by the latest consumer confidence reading showing Americans grew more optimistic that the U.S. would reach trade agreements with key nations in the months ahead.
Stocks soared higher on Tuesday as President Donald Trump's latest tariff update over the weekend improved sentiment across a still cautious market. Investors were also encouraged by the latest consumer confidence reading showing Americans grew more optimistic that the U.S. would reach trade agreements with key nations in the months ahead.
The Dow Jones Industrial Average
The Dow Jones Industrial Average
Trump on Tuesday wrote on his social media platform Truth Social that the European Union has taken "positive" steps towards trade talks, boosting investor hopes that the 27-member alliance will reach a deal with the United States only a few days after Trump said discussions were "going nowhere."
Trump on Tuesday wrote on his social media platform Truth Social that the European Union has taken "positive" steps towards trade talks, boosting investor hopes that the 27-member alliance will reach a deal with the United States only a few days after Trump said discussions were "going nowhere."
On Sunday, Trump had agreed to extend the 50% tariff deadline on the E.U. until July 9, over a month from its previous June 1 deadline. President of the European Commission Ursula von der Leyen wrote in a post on X that the two economic superpowers "share the world's most consequential and close trade relationship," adding that "Europe is ready to advance talks swiftly and decisively."
On Sunday, Trump had agreed to extend the 50% tariff deadline on the E.U. until July 9, over a month from its previous June 1 deadline. President of the European Commission Ursula von der Leyen wrote in a post on X that the two economic superpowers "share the world's most consequential and close trade relationship," adding that "Europe is ready to advance talks swiftly and decisively."
Trump had initially imposed 20% tariffs on imports from the E.U. as part of his Liberation Day "reciprocal tariffs" enacted in early April, before reducing the rate to 10% for 90 days. On Friday, Trump proposed that the import duties on European products should be raised to 50%.
Trump had initially imposed 20% tariffs on imports from the E.U. as part of his Liberation Day "reciprocal tariffs" enacted in early April, before reducing the rate to 10% for 90 days. On Friday, Trump proposed that the import duties on European products should be raised to 50%.
The Conference Board's consumer confidence reading for May also offered another bright spot on Tuesday, as the survey saw notable gains in the later half of the month after the U.S. and China reached a tentative tariff truce to support ongoing negotiations. The survey's headline index climbed 12.3 points from April to 98.0, coming in well above the Dow Jones consensus estimate for 86.0. May's confidence increase also ended five straight months of declines as consumers grew more concerned over recession risks for the U.S. economy.
The Conference Board's consumer confidence reading for May also offered another bright spot on Tuesday, as the survey saw notable gains in the later half of the month after the U.S. and China reached a tentative tariff truce to support ongoing negotiations. The survey's headline index climbed 12.3 points from April to 98.0, coming in well above the Dow Jones consensus estimate for 86.0. May's confidence increase also ended five straight months of declines as consumers grew more concerned over recession risks for the U.S. economy.
Beneath the headline, the survey's present situation index -- tracks sentiment for current business and labor market conditions -- rose by 4.8 points to 135.9, and the expectations index -- gauges near-term outlooks for income, business, and employment -- surged by 17.4 points to 72.8.
Beneath the headline, the survey's present situation index -- tracks sentiment for current business and labor market conditions -- rose by 4.8 points to 135.9, and the expectations index -- gauges near-term outlooks for income, business, and employment -- surged by 17.4 points to 72.8.
Stephanie Guichard, senior economist of global indicators at The Conference Board, said in a statement that consumers also grew more bullish towards the stock market in May, "with 44% expecting stock prices to increase over the next 12 months (up from 37.6% in April) and 37.7% expecting stock prices to decline (down from 47.2% in April)."
Stephanie Guichard, senior economist of global indicators at The Conference Board, said in a statement that consumers also grew more bullish towards the stock market in May, "with 44% expecting stock prices to increase over the next 12 months (up from 37.6% in April) and 37.7% expecting stock prices to decline (down from 47.2% in April)."
Renewed tariff uncertainty and growing concerns surrounding the federal government's debt pulled the broader market lower last week, with the Dow, S&P 500 and Nasdaq each losing more than 2%. Tuesday's positive momentum, however, adds to Wall Street's gains for May, with all three major averages currently on track to end the month in the green.
Renewed tariff uncertainty and growing concerns surrounding the federal government's debt pulled the broader market lower last week, with the Dow, S&P 500 and Nasdaq each losing more than 2%. Tuesday's positive momentum, however, adds to Wall Street's gains for May, with all three major averages currently on track to end the month in the green.
Barclays Economist Jonathan Millar took a more cautious outlook towards the consumer on Tuesday despite May's positive survey, forecasting that Americans could cut spending in the months ahead due to increased macroeconomic uncertainty. Millar cited headwinds from the Trump administration's economic policies are "set to gradually intensify in the coming months," with the effects of more supportive fiscal policies on income and spending being "unlikely to materialize until next year."
Barclays Economist Jonathan Millar took a more cautious outlook towards the consumer on Tuesday despite May's positive survey, forecasting that Americans could cut spending in the months ahead due to increased macroeconomic uncertainty. Millar cited headwinds from the Trump administration's economic policies are "set to gradually intensify in the coming months," with the effects of more supportive fiscal policies on income and spending being "unlikely to materialize until next year."
Minneapolis Federal Reserve President Neel Kashkari said in prepared remarks at the Bank of Japan's Institute for Monetary and Economic Studies conference on Tuesday echoed sentiment from other central bankers that more clarity on the impacts Trump's tariffs will have on the economy is needed before policymakers can reassess their stance on interest rates.
Minneapolis Federal Reserve President Neel Kashkari said in prepared remarks at the Bank of Japan's Institute for Monetary and Economic Studies conference on Tuesday echoed sentiment from other central bankers that more clarity on the impacts Trump's tariffs will have on the economy is needed before policymakers can reassess their stance on interest rates.
Kashkari said the latest economic shock "driven by tariffs and trade policy uncertainty," has presented a challenge for policymakers: "We have to pick one: fight inflation or support economic activity?"
Kashkari said the latest economic shock "driven by tariffs and trade policy uncertainty," has presented a challenge for policymakers: "We have to pick one: fight inflation or support economic activity?"
"A large increase in tariffs will increase inflation and decrease economic activity, at least in the short run," Kashkari warned. "Given that monetary policy can either push both inflation and economic activity up or push them both down, tariffs present a special challenge for monetary policymakers."
"A large increase in tariffs will increase inflation and decrease economic activity, at least in the short run," Kashkari warned. "Given that monetary policy can either push both inflation and economic activity up or push them both down, tariffs present a special challenge for monetary policymakers."
Looking ahead, traders will turn their attention towards the last wave of major earnings reports this earnings season, with Nvidia
Looking ahead, traders will turn their attention towards the last wave of major earnings reports this earnings season, with Nvidia
