• US stocks gained Monday on a tech tariff exemption, but indices remain below early April levels.
• Major US indices (S&P 500, Dow, Nasdaq) rose; VIX (volatility) dropped sharply.
• Tech (Apple, Dell) and Auto (Ford, GM, Stellantis) stocks rallied on tariff-related news.
• US futures were mixed early Tuesday.
• Tariff uncertainty persists; US launched a semiconductor import probe amid ongoing trade talks.
• Consumer anxiety increased (NY Fed); Fed’s Waller sees “transitory” tariff inflation, hints at potential rate cuts.
• Q1 Earnings: BofA beat; Nvidia plans major US AI investment; LVMH missed; Boeing hit by China delivery halt.
• European/Asian markets mostly gained on US tariff news; China Q1 GDP awaited.
• US Treasury yields climbed amid volatility and US debt demand concerns.
• Gold steady (safe-haven), Oil down (IEA demand cut), Bitcoin up on tariff hopes/speculation.
• Market sentiment improved slightly, but US trade policy uncertainty remains the key risk.

An unexpected tariff exemption from President Trump boosted technology stocks on Monday, leading to gains in the broader market despite choppy trading conditions. While stocks did advance last week and again on Monday, the major averages remain significantly lower compared to their levels before the April 2 tariff announcement – the S&P 500 by 4.7%, the Nasdaq by about 4.4%, and the Dow by roughly 4%. Looking ahead, U.S. stock futures showed little change early Tuesday following back-to-back gains for the S&P 500, with market participants anticipating fresh first-quarter earnings data.

US Market Previous Day:

U.S. stocks rose Monday, supported by a modest rebound in technology shares following news of a tariff exemption for key electronic goods. The S&P 500 climbed 0.79% to close at 5,405.97, while the Dow Jones Industrial Average gained 312.08 points, or 0.78%, ending at 40,524.79. The Nasdaq Composite advanced 0.64%, finishing the day at 16,831.48. Despite the positive close, all three major indexes experienced intraday volatility, trading in negative territory at several points during the session.

The gains were fueled by updated guidance released Friday by U.S. Customs and Border Protection, which clarified that electronic products such as smartphones, computers, and semiconductors would be temporarily exempt from the new round of “reciprocal” tariffs. However, the boost was tempered by weekend comments from President Donald Trump and Commerce Secretary Howard Lutnick, who suggested these exemptions may be short-lived.

(Source: TradingView.com)

Apple shares gained 2.2% on the news, while Dell Technologies jumped nearly 4%. The Technology Select Sector SPDR Fund (XLK) also added close to 1% for the day. Market sentiment improved notably, with the CBOE Volatility Index (VIX) — often referred to as Wall Street’s fear gauge — plunging more than 6 points, signaling reduced investor anxiety. Meanwhile, a drop in U.S. Treasury yields added further support to equities.

Automaker stocks also saw notable gains after President Trump said he intended to “help some of the car companies” adjust to his proposed 25% auto tariffs. While he did not specify what form this support would take, investors welcomed the remarks. Ford Motor Company rose 4%, General Motors gained 3.5%, and Stellantis surged 5.6% on the day.

US Futures Remain Flat:

• Dow Jones Industrial Average futures lead the pack with declines of 0.31%
• S&P 500 futures showed meagre losses of 0.27%
• Nasdaq Composite futures remained flat with a loss of 0.17%

Tariff Update:

U.S. National Economic Council Director Kevin Hassett said Monday that “more than 10” countries have made “very good, amazing” trade deal offers to the U.S., signaling an aggressive push by the White House to reshape global trade alliances. Hassett also downplayed fears of a downturn, asserting there is “no chance at all” that the U.S. will experience a recession in 2025.

Meanwhile, the U.S. Commerce Department launched a national security investigation into semiconductor imports and related downstream products, according to a Federal Register notice published Monday. The official call for public comments indicates that chip technology and the broader electronics supply chain are unlikely to be fully excluded from President Trump’s tariff regime, despite his Friday announcement that many tech items would be exempt from reciprocal tariffs.

Key Economic Data/News:

Fresh economic data continued to reflect growing anxiety among U.S. consumers. A New York Fed survey showed expectations for higher unemployment surged in March, with 44% of respondents saying they believe the jobless rate will rise over the next year — the highest level since April 2020. Stock market sentiment also soured, with just 33.8% expecting markets to move higher in the coming year, marking the lowest reading since June 2022. While medium- and long-term inflation expectations remained mostly stable, short-term price forecasts ticked higher amid growing trade tensions.

Federal Reserve Governor Christopher Waller attempted to reassure markets, saying Monday that he expects the inflationary impact of Trump’s tariffs to be “transitory.” Waller acknowledged that the Fed previously misjudged the persistence of inflation in 2021, but said that shouldn’t preclude using the term again. He noted the Fed could even consider cutting rates if inflation pressures reemerge in an adverse scenario.

Earnings Season/Company News:

Bank of America exceeded Wall Street expectations in its first-quarter report on Tuesday, posting earnings of $0.90 per share on revenue of $27.51 billion, surpassing consensus estimates of $0.82 and $26.99 billion, respectively. The bank was buoyed by a 9% rise in trading revenue, helped by a 17% jump in equities trading as market volatility—driven by uncertainty surrounding President Trump’s tariff policies—spurred activity. Net interest income (NII) climbed 3% to $14.4 billion, reflecting higher interest rates and loan balances. Shares rose 1.9% in pre-market trading. Bank of America joins JPMorgan Chase, Goldman Sachs, and Morgan Stanley in reporting stronger-than-expected Q1 results, with all seeing strength in trading divisions.

Nvidia announced plans to manufacture up to $500 billion worth of artificial intelligence infrastructure in the United States over the next four years, in partnership with Taiwan Semiconductor and through new production facilities. Production of its new Blackwell AI chips has already commenced in Phoenix, and Nvidia is also constructing plants in Texas to produce AI supercomputers — the first of their kind to be fully made in the U.S. The move marks a major strategic investment in domestic AI capabilities amid heightened geopolitical tensions.

LVMH reported a disappointing first quarter, with revenue falling 3% year-over-year, missing analyst expectations for a 2% increase. The shortfall was attributed to soft demand in China and a pullback in U.S. consumer spending on beauty products and alcoholic beverages. The luxury goods giant — whose portfolio includes brands like Bulgari and Hennessy — saw its U.S.-listed depositary receipts (LVMUY) drop as much as 7.5% following the results. With Trump’s tariff regime looming over high-end imports, concerns are rising over a potentially difficult year ahead for the luxury sector.

Boeing shares slipped 2.5% in Tuesday’s pre-market trading after reports emerged that China has instructed its domestic airlines to halt deliveries of Boeing jets. The move is viewed as a direct retaliatory measure amid escalating U.S.–China trade tensions, particularly after the imposition of steep U.S. tariffs on Chinese imports. Given China’s significant role in global aircraft demand — projected at 20% over the next two decades — this development poses serious headwinds for Boeing’s international sales pipeline.

Global Market Trends:

European markets moved higher on Tuesday, buoyed by cautious optimism that some relief may be on the horizon from President Donald Trump’s aggressive tariff agenda. The pan-European Stoxx 600 index gained 1.1%, with nearly all sectors finishing in positive territory. Auto stocks led the advance after Trump remarked Monday that he is looking to “help some of the car companies” impacted by the 25% auto tariffs, sparking speculation of broader industry relief.

Asia-Pacific markets also finished mostly higher, echoing Wall Street’s upbeat tone from the previous session, where a tech-driven rally lifted all three major U.S. indexes. Japan’s Nikkei 225 rose 0.84% to close at 34,267.54, while the broader Topix index gained 1% to end at 2,513.35. South Korea’s Kospi added 0.88% to settle at 2,477.41, and the Kosdaq ticked up 0.41% to 711.92. In Australia, the S&P/ASX 200 rose a modest 0.17% to 7,761.70. Hong Kong’s Hang Seng Index was up 0.23% at 21,466.27, while Mainland China’s CSI 300 closed flat at 3,761.23. Investors are now awaiting China’s Q1 2025 GDP figures, due for release tomorrow.

Debt Market:

U.S. Treasury yields resumed their climb on Tuesday after a brief reprieve on Monday, continuing a broader sell-off as investors reduce exposure to government debt. The benchmark 10-year Treasury yield rose nearly 3 basis points to 4.395%, while the 2-year yield added close to 2 basis points to 3.853%.

(Source: TradingView.com)

This latest uptick follows a week of pronounced volatility in the bond market, during which the 10-year yield surged more than 50 basis points — one of the sharpest two-day jumps on record. Concerns persist about the long-term appetite for U.S. debt, particularly from major foreign holders such as China and Japan. China remains the second-largest foreign holder of U.S. Treasuries, with an estimated $760 billion in holdings, raising questions about global demand stability as geopolitical tensions remain elevated.

Commodities and Other Assets:

Gold prices remained steady in Asian trade on Tuesday, holding near recent highs as demand for safe-haven assets continued to be supported by lingering uncertainty around U.S. trade tariffs. Bullion saw some pressure in recent sessions following the exemption of electronic imports from steep U.S. tariffs on China, which briefly boosted risk sentiment. President Donald Trump on Monday signaled the possibility of more exemptions, helping to temper concerns. However, the broader context of a deepening trade war — with Trump’s 145% tariffs on Chinese goods and Beijing’s retaliatory 125% tariffs — kept gold buoyed by safe-haven demand. A weaker dollar, triggered by a sharp selloff in U.S. Treasuries, also lent support to gold and the broader metals complex.

Oil prices edged lower on Tuesday after the International Energy Agency (IEA) followed OPEC in cutting its global oil demand forecast. The bearish outlook weighed on prices, though losses were somewhat limited by Trump’s hints at further tariff exemptions. HSBC revised its Brent crude forecast down to $68.50 per barrel for 2025 and $65 for 2026, citing concerns about escalating trade tensions and declining global demand.

(Source: TradingView.com)

Bitcoin advanced over 1% on Tuesday after muted moves a day earlier, lifted by hopes of additional tariff relief and a potential pause on auto levies from the U.S. administration. Media reports also indicated that the Trump administration was weighing a controversial plan to use tariff revenue to purchase Bitcoin, aiming to bolster national reserves without increasing debt or taxes. This follows a recent executive order to establish a strategic crypto reserve.

Market Sentiment:

U.S. equity markets have now booked two consecutive days of gains, as investors welcomed tariff exemptions and seized on bargain-buying opportunities following weeks of steep declines. The easing of trade restrictions, particularly on tech products, helped boost sentiment across risk assets.

Additionally, the Q1 earnings season is gaining momentum. Reports from major U.S. banks so far suggest resilience in corporate profits despite the uncertain macroeconomic backdrop. Still, while the recent exemptions provide near-term relief, uncertainty around the broader trade policy outlook continues to cast a shadow over global markets.