Stock futures jumped early Monday after reports claimed President Donald Trump plans to delay some tariffs that were supposed to start on April 2. The move raised hopes that the US would not trigger a full-scale global trade war. Dow Jones futures rose 411 points (1%), the S&P 500 rose 1.2%, and the Nasdaq 100 jumped 1.6%. Tesla shares, which have fallen for nine straight weeks, rose 3.6% in premarket trading, while Meta and Nvidia shares rose nearly 3% and 2.1%, respectively.
Investors remained cautious ahead of the implementation of Trump's retaliatory tariffs, which target countries that have imposed duties on US imports. However, reports from the Wall Street Journal and Bloomberg News claimed that the tariffs could be more limited and that some countries and industries would be exempted. The situation remains uncertain and could change at any time. Trump himself hinted on Friday that there could be a “relaxation” in the implementation of the tariffs, which would help ease market tensions.
According to Tobin Marcus of Wolfe Research, the exemption of certain sectors from the tariffs would reduce the overall scale and minimize the impact on the affected sectors. However, he still expects a negative reaction from the market, although not as severe as previously expected. Concerns about Trump’s trade policy have also been reinforced by weaker consumer sentiment data, which has caused the stock market to fall since late February.
However, investors received some reassurance from Federal Reserve Chairman Jerome Powell, who said that the negative impact of Trump’s tariffs may be temporary. On the economic front, investors are waiting for the consumer confidence report on Tuesday and the unemployment claims report on Thursday to further assess the market situation.
Stock markets managed to register gains last week after several weeks of declines. The S&P 500 is now 7.8% below its all-time high, while the Nasdaq Composite, which also snapped a four-week losing streak, is now 12% below its record high. Trump's decision to suspend some tariffs may be a catalyst for a market recovery in the near term.
