NEW YORK (AP) — Wall Street is rallying Tuesday as the roller-coaster ride created by President Donald Trump’s trade policies whips back upward, this time because of a delay for his tariffs on the European Union.

The S&P 500 was up 1.9% in its first trading since Trump said Sunday that the United States will delay a 50% tariff on goods coming from the European Union until July 9 from June 1. The European Union’s chief trade negotiator later said on Monday that he had “good calls” with Trump officials and the EU was “fully committed” to reaching a trade deal by July 9.

The Dow Jones Industrial Average was up 646 points, or 1.6%, as of 1:32 p.m. Eastern time, and the Nasdaq composite was 2.3% higher. They’re on track to more than recover their losses from Friday, when Wall Street’s roller coaster dropped after Trump announced the tariffs on France, Germany and the other 25 countries represented by the European Union.

Such talks give hopes that the United States can reach a deal with one of its largest trading partners that would keep global commerce moving and avoid a possible recession. Trump reached a similar pause on his stiff tariffs for China earlier this month, which launched an even bigger rally on Wall Street at the time.

Caution still remains on Wall Street, of course, even if the S&P 500 has climbed back within 4% of its record after falling roughly 20% below the mark last month.

Talks don’t guarantee results, and a worry is that all the uncertainty caused by on-again-off-again tariffs could damage the economy itself by pushing U.S. households and businesses to freeze their spending and investments out of fear of what’s to come. Surveys have already shown U.S. consumers are feeling worse about the economy’s prospects and where inflation may be heading because of tariffs.

On Tuesday, though, optimism mostly ruled. The stock market’s gains accelerated after a report released by the Conference Board said confidence among U.S. consumers improved by more in May than economists expected.

It was the first increase in six months, and consumers’ expectations for income, business and the job market in the short term jumped sharply, though it still remains below the level that typically signals a recession ahead. About half the survey results came after Trump paused some of his tariffs on China.

Nvidia rallied 3.2% and was one of the strongest forces driving the market higher ahead of its profit report coming on Wednesday. It’s the last to report this quarter among the “Magnificent Seven” Big Tech companies that have grown so large that their stock movements dominate the rest of the market.

Nvidia has been riding a tidal wave of growth created by the frenzy around artificial-intelligence technology, but it is also facing criticism that its stock price has shot too high.

Informatica climbed 5.8% after Salesforce said it would buy the AI-powered cloud data management company in an all-stock deal valuing it at about $8 billion. Salesforce added 1.9%.

The gains were widespread, and more than 90% of the stocks within the S&P 500 were rising.

One of the outliers was AutoZone, which fell 4.6% following a mixed report on its performance for the three months through May 10. Its profit fell short of analysts’ expectations, though its growth in revenue was stronger than expected.

CEO Phil Daniele said both its DIY and commercial businesses did well domestically, but shifting moves in foreign-currency values put pressure on the retailer’s operations outside the United States. The U.S. dollar’s value has been swerving against other currencies because of uncertainty around Trump’s trade policies. And when the dollar weakens, it can mean each peso of sales made in Mexico is worth fewer dollars.

In the bond market, Treasury yields eased to take some of the pressure off the stock market. The yield on the 10-year Treasury fell to 4.44% from 4.51% late Friday. It had been rising last week, in part because of worries about the U.S. government’s rapidly increasing debt.

Yields have been climbing for bond markets around the developed world, particularly in Japan, where a recent auction of longer-term bonds found relatively few buyers. But analysts said worries eased a bit after Japan’s finance ministry sent a questionnaire to bond investors that they took as a signal of efforts to calm the market.

In stock markets abroad, European indexes mostly rose, while Asian indexes were mixed.

___

AP Business Writers Matt Ott and Elaine Kurtenbach contributed.

Share:
More In Markets
Federal Reserve cuts key rate as shutdown clouds economic outlook
The Federal Reserve cut its key interest rate Wednesday for a second time this year as it seeks to shore up economic growth and hiring even as inflation stays elevated. The move comes amid a fraught time for the central bank, with hiring sluggish and yet inflation stuck above the Fed’s 2% target. Compounding its challenges, the central bank is navigating without much of the economic data it typically relies on from the government. The Fed has signaled it may reduce its key rate again in December but the data drought raises the uncertainty around its next moves. Fed Chair Jerome Powell told reporters that there were “strongly differing views” at the central bank's policy meeting about to proceed going forward.
Federal Reserve likely to cut key rate Wednesday, may signal another
The Federal Reserve will almost certainly cut its key interest rate on Wednesday and could signal it expects another cut in December as the central bank seeks to bolster hiring. A cut Wednesday would be the second this year and could benefit consumers by bringing down borrowing costs for mortgages and auto loans. Since Fed chair Jerome Powell strongly signaled in late August that rate cuts were likely this year, the average 30-year mortgage rate has fallen to about 6.2% from 6.6%. Still, the Fed is navigating an unusual period for the U.S. economy and its future moves are harder to anticipate than is typically the case.
Wall Street rallies toward more records as gold’s price slumps again
Stocks are rallying toward more records ahead of a week packed with potentially market-moving events. The S&P 500 rose 1% Monday. The Dow Jones Industrial Average added 224 points, and the Nasdaq composite jumped 1.7%. Stocks also climbed in Asia ahead of a meeting on Thursday between the heads of the United States and China. The hope is that the talks could clear rising tensions between the world’s two largest economies. This upcoming week will feature profit reports from some of Wall Street's most influential companies and a meeting by the Federal Reserve on interest rates. Gold fell back toward $4,000 per ounce.
US and China say a trade deal is drawing closer as meeting nears
U.S. and Chinese officials say a trade deal between the world’s two largest economies is drawing closer. The sides have reached an initial consensus for President Donald Trump and Chinese leader Xi Jinping to aim to finalize during their high-stakes meeting Thursday in South Korea. Any agreement would be a relief to international markets. Trump's treasury secretary says discussions with China yielded preliminary agreements to stop the precursor chemicals for fentanyl from coming into the United States. Scott Bessent also says Beijing would make “substantial” purchases of soybean and other agricultural products while putting off export controls on rare earth elements needed for advanced technologies.
Social Security recipients get a 2.8% cost-of-living boost
Some seniors say the Social Security Administration's cost-of-living adjustment won’t help much in their ability to pay for their daily expenses. The agency announced Friday the annual cost-of-living adjustment will go up by 2.8% in 2026, translating to an average increase of more than $56 for retirees every month. Eighty-year-old Florence, South Carolina, resident Linda Deas says it does not match the current "affordability crisis.” The benefits increase will go into effect for Social Security recipients beginning in January. Friday’s announcement was meant to be made last week but was delayed because of the federal government shutdown. Recipients got a 2.5% COLA boost in 2025 and a 3.2% increase in 2024.
Wall Street hits records following an encouraging update on inflation
Wall Street is heading for records after an update said U.S. households are feeling a bit less pain from inflation than feared. The S&P 500 climbed 1% Friday and was on track to top its all-time high set earlier this month. The Dow Jones Industrial Average jumped 529 points, and the Nasdaq composite rose 1.3%. Both are also heading toward records. The inflation data could clear the way for the Federal Reserve to keep cutting interest rates in hopes of helping the slowing job market. A strong earnings reports from Ford Motor and continued gains for AI stars also drove stocks higher.
Load More