Wall Street soars after tariff truce: Tech leads the rally, but caution remains

Wall Street soars after tariff truce: Tech leads the rally, but caution remains

Wall Street regained strong momentum on Tuesday, snapping a four-session losing streak, after U.S. President Donald Trump injected fresh optimism into the markets by announcing a delay of the planned 50% tariffs on the European Union until July 9. The move eased trade tensions and restored investor confidence, sparking a broad rally across sectors—led by technology stocks.

Major index performance

The Dow Jones Industrial Average surged 740.58 points (+1.8%) to close at 42,343.65.

The S&P 500 rose 2.1% to 5,921.54.

The Nasdaq Composite jumped 2.5% to 19,199.16, fueled by strong gains in tech, notably Tesla, which rallied 7% after Elon Musk confirmed renewed direct involvement in managing his companies.

Political Momentum Lifts Sentiment Trump stated on Sunday that the tariff delay followed a “constructive call” with European Commission President Ursula von der Leyen, highlighting improved relations with Brussels. Kevin Hassett, Director of the National Economic Council, added that further trade deals could be reached this week, bolstering hopes of easing global trade conflicts.

Economic Data Provides Additional Support Better-than-expected U.S. consumer confidence data for May also boosted sentiment, raising expectations of continued strength in consumer spending and corporate earnings.

Key stock movers

Tesla (TSLA): Up 7% after Elon Musk signaled he would refocus on managing operations directly.

Tech giants like Nvidia, AMD, Apple, and Microsoft posted strong gains.

U.S. Steel: Rose 2% amid reports of a potential $55/share acquisition by Japan’s Nippon Steel.

Dan Ryan, Managing Partner at Sincerus Advisory, noted:

“The long weekend acted as a reset button. Trade tension faded quickly and new negotiation channels opened up.”

Earnings Results Reinforce Optimism According to FactSet, more than 78% of S&P 500 companies have exceeded analysts’ estimates during Q1 earnings season, reflecting stronger-than-expected corporate performance and enhancing market appeal despite broader risks.

Warnings of potential headwinds

Barclays warned of a potential slowdown in consumer spending amid economic uncertainty, suggesting fiscal policy effects may not be felt until next year.

Citi’s Scott Chronert pointed out that rising interest rates could weigh on stock valuations through higher discounting of future cash flows.

Controversy Around 'Trump Media' Trump Media & Technology Group shares dropped 10% after the company announced a $2.5 billion Bitcoin investment. CEO Devin Nunes stated:

“Bitcoin is a sovereign tool of financial freedom, and we’ll hold it as a strategic asset on our balance sheet.”

Conclusion U.S. markets rebounded strongly as trade tensions eased, but investors remain alert to upcoming monetary policy signals and economic data. While corporate earnings and tariff pauses have boosted optimism, warnings of consumer fatigue and global instability are factors that can’t be ignored.

(This article was written by the author with assistance from language generation tools to support structure and clarity. All insights and opinions are entirely the author’s own.)