NEW YORK (AP) — Wall Street is climbing Tuesday as the roller-coaster ride created by President Donald Trump’s trade policies whips back upward, this time because of a temporary pause for tariffs on the European Union.
The S&P 500 was 1% higher 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 297 points, or 0.7%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 1.3% 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 the wheels of global commerce going and avoid a possible recession. Trump reached a similar pause on his stiff tariffs with China earlier this month, which unleashed 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 4.6% of its record after falling roughly 20% below the market 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 much worse about the economy’s prospects and where inflation may be heading because of tariffs.
On Tuesday, though, optimism mostly ruled.
Nvidia rose 1.8% 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 5.6% 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 slipped 0.4%.
AutoZone added 0.8% following a mixed report on its performance for the three months through May 10. Its profit fell short of analysts’ expectations, but its growth in revenue was stronger than expected.
CEO Phil Daniele said shifting moves in foreign-currency markets put pressure on the retailer’s operations outside the United States. The U.S. dollar’s value has been jumping up and down against everything from the euro to the Mexican peso because of uncertainty around Trump’s trade policies. When the dollar weakens, it can mean each peso of sales made in Mexico may be 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 4.48% from 4.51% late Friday. It had been rising late 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. Analysts said worries eased 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 rose, while Asian indexes were mixed.
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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.