U.S. stocks advance as Trump eases EU tariff threat
NEW YORK, May 27 (Xinhua) -- U.S. stocks ended higher on Tuesday, after U.S. President Donald Trump softened his stance on tariff threats toward the European Union, signaling that trade negotiations were regaining momentum.
The Dow Jones Industrial Average rose 740.58 points, or 1.78 percent, to 42,343.65. The S&P 500 added 118.72 points, or 2.05 percent, to 5,921.54. The Nasdaq Composite Index increased by 461.96 points, or 2.47 percent, to 19,199.16.
All of the 11 primary S&P 500 sectors ended in green, with consumer discretionary and technology leading the gainers by rising 3.04 percent and 2.55 percent, respectively. Utilities posted the weakest growth, up by 0.77 percent.
Over the weekend, Trump announced he would delay a planned 50 percent tariff on EU imports until July 9, following a request from European Commission President Ursula von der Leyen. The delay came after Trump had previously proposed implementing the levy on June 1.
U.S. National Economic Council Director Kevin Hassett told CNBC's Squawk Box that he anticipates more trade deals could be finalized this week.
Investor optimism was also buoyed by stronger-than-expected U.S. consumer confidence data for May, with hopes for trade resolutions helping lift sentiment. According to The Conference Board, U.S. consumer sentiment improved across all age and income groups, signaling a broad recovery in outlook.
On the corporate front, Tesla jumped 6.94 percent after its CEO Elon Musk said he was shifting focus away from political distractions and back to his business ventures. U.S. Steel climbed nearly 2 percent after CNBC reported that Japan's Nippon Steel is close to finalizing its 55-U.S.-dollars-per-share acquisition of the company.
The rally marked a strong start to the shortened trading week, as markets reopened following the Memorial Day holiday. The advance was broad-based, with over 90 percent of S&P 500 stocks closing higher, and small-cap stocks also rallied, pushing the Russell 2000 index up 2.48 percent.
Tuesday's gains came after a tough week for Wall Street, where all three major indexes -- the Dow, S&P 500, and Nasdaq -- fell more than 2 percent on fears sparked by Trump's initial tariff threats toward the EU.
"It seems like the long holiday weekend only built up momentum for today's sharp rebound," said Dann Ryan, managing partner at Sincerus Advisory. "The trade tensions that briefly flared up have already cooled down -- and now it looks like negotiations are moving into the fast lane."
U.S. Treasury bonds spearheaded a broader decline in global bond yields on Tuesday, as markets welcomed signs that Japan may take steps to stabilize its bond market, which recently saw long-term government debt yields spike to multi-decade highs. The 30-year U.S. Treasury yield eased back to around 4.94 percent.
Attention is now shifting to a busy week of economic data releases, as well as upcoming comments from Federal Reserve officials, who are widely expected to maintain current interest rates, consistent with previous guidance. Meanwhile, Trump's controversial tax bill remains in focus after narrowly clearing the House of Representatives last week.
Nvidia rose 3.21 percent following reports that the company is preparing to release a lower-cost AI chip for China, just ahead of its highly anticipated earnings report on Wednesday, one of the most closely watched of the quarter. Other companies set to report this week include Okta, Macy's, and Costco. According to FactSet, over 95 percent of S&P 500 companies have reported earnings this season, with nearly 78 percent exceeding analysts' expectations.
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