US stocks experienced a modest increase on Monday as investors sought to capitalize on the Trump administration’s decision to exempt tariffs on smartphones, computers, and various electronics imported from China.
By midday, the Dow Jones Industrial Average had risen by 160 points, or 0.4%. The broader S&P 500 index was up by 0.5%, while the tech-focused Nasdaq Composite saw an increase of 0.3%.
All three major stock indices began the day with gains but later lost momentum as the rally in technology stocks faltered. The Nasdaq had surged by as much as 2.4% before oscillating between positive and negative territory. The Dow and S&P 500 also briefly dipped into negative territory before recovering.
US stock futures had risen over the weekend after investors learned on Saturday that the Trump administration had granted tariff exemptions for electronics imported from China, as indicated by a notice from US Customs and Border Protection released late Friday.
These exemptions followed President Donald Trump’s announcement on Wednesday of a 145% tariff on imports from China. However, they do not extend to the 20% tariff imposed on imports related to China’s involvement in the fentanyl trade. Notably, tech stocks such as Apple saw gains on Monday morning.
Despite the rise in stock futures, uncertainty persists regarding the trade conflict with China. Commerce Secretary Howard Lutnick stated on Sunday that the exemptions for electronics are merely a temporary measure. He indicated that these products would eventually be subject to separate tariffs.
“Electronics are exempt from the reciprocal tariffs, but they will be included in the semiconductor tariffs, which are expected to be implemented in about a month or two,” Lutnick remarked.
US stocks experienced modest increases following rallies in international markets. The European benchmark, STOXX 600, rose by 2.7%, while Germany’s DAX saw a gain of 2.85%. In Asia, Japan’s Nikkei 225 increased by 1.2%, and Hong Kong’s Hang Seng climbed by 2.4%. Conversely, Taiwan’s benchmark index declined by 0.8%, standing out amidst the overall positive trends.
The slight uptick in US stocks on Monday coincided with a new survey from the New York Federal Reserve, which revealed growing consumer pessimism regarding the short-term economic outlook. The survey indicated a significant rise in respondents’ near-term inflation expectations, which surged by 0.5 percentage points to 3.6%, marking the highest level in a year and a half.
US stocks have experienced considerable volatility over the past two weeks. The introduction of former President Trump’s “reciprocal tariffs” and the subsequent 90-day suspension of most of these tariffs have caused significant fluctuations in the market.
The S&P 500 dropped by 9% during the first week of April, marking its worst performance since 2020, before rebounding with a 5.7% increase in the second week, its best week since 2023. On Wednesday, the stock market recorded its third-largest single-day gain in modern history following Trump’s announcement of a 90-day pause on most tariffs. Despite this surge, the S&P 500 remains below its closing value from April 2, just prior to the initial announcement of the tariffs.
Wall Street aims to sustain its rally, although uncertainty looms. The ambiguity surrounding Trump’s trade policy has left traders uncertain about how to strategically position their investments, raising concerns about the potential impact on US economic growth.
“While any delay in tariffs is marginally beneficial, it does not equate to their elimination,” analysts at Morgan Stanley noted in a report on Friday. “Historical trends indicate that prolonged uncertainty can adversely affect business confidence, leading to reduced spending and hiring.”
Goldman Sachs CEO David Solomon remarked in an earnings press release on Monday that the current environment is “markedly different” from previous conditions.
Solomon remarked during a conference call with analysts that the likelihood of a recession has risen due to increasing signs of a slowdown in economic activity. He noted that their clients, which include corporate CEOs and institutional investors, are expressing concern over the considerable uncertainty—both in the short and long term—that has hindered their capacity to make critical decisions.
Billionaire Ray Dalio stated over the weekend that President Trump’s tariffs have contributed to bringing the United States close to a recession, or potentially even “something worse.”
“We are currently at a pivotal decision-making juncture and very near a recession,” the hedge fund manager conveyed on Sunday. “I am apprehensive about the possibility of something more severe than a recession if this situation is not managed properly.”
On Friday, analysts at Citi revised their year-end target for the S&P 500 down to 5,800 from 6,500, aligning with other major Wall Street firms that have adjusted their projections for corporate earnings and growth this year due to an unpredictable tariff landscape.
Citi analysts commented in a note on Friday that the optimistic sentiment that characterized the beginning of the year has now been replaced by profound uncertainty.
This week, investors will closely monitor the Treasury market, which has recently experienced such unusual volatility that it alarmed the White House and raised concerns about whether U.S. government debt is losing its reputation as a safe haven.
US Treasuries experienced a slight increase on Monday and remained relatively stable following a significant decline the previous week. The yield on the 10-year Treasury note was approximately 4.4% on Monday morning, after having risen above 4.5% on Friday. It is important to note that yields and bond prices move in opposite directions.
The US dollar index, which assesses the dollar’s strength against six other currencies, fell by 0.4% on Monday, marking its largest weekly drop since 2022. The dollar has generally weakened this year due to concerns regarding diminishing investor confidence in the United States.
In contrast, gold prices have surged this year as investors seek safe-haven assets. On Friday, the price of gold exceeded a record $3,200 per troy ounce, reflecting an increase of over 21% this year. Analysts at Goldman Sachs raised their year-end price prediction for gold to $3,700 on Friday, highlighting the growing demand for bullion amid ongoing economic uncertainty.