Stocks on Wall Street saw a broad increase on Monday, largely driven by optimism that the Trump administration might opt for a more focused strategy as it prepares to impose a fresh series of tariffs on imported goods set for next week. The S&P 500 made a notable gain of 1.8%, rebounding after its first positive week following a month-long slump. Meanwhile, the Dow Jones Industrial Average advanced by 1.4%, and the Nasdaq composite rose by 2.3%.
“The market was set to respond positively if the administration eased some tariff threats or offered ways out of the current tensions, which is somewhat what we’re witnessing,” commented a market expert.
Despite these positive movements, the S&P 500 is still down by 1.9% for the year due to ongoing fears that a trade war could adversely affect economic growth and spark inflation pressures. Wall Street continues to closely monitor the potential impacts of tariffs on inflation, consumer spending, and overall economic growth. Stocks have been volatile due to announced tariffs, their subsequent implementation, or possible withdrawal. The next set of tariffs, scheduled for April 2, might be diluted or delayed to avoid immediate implementation.
President Trump has maintained a cautious stance regarding tariff plans, indicating on Monday his desire for “reciprocal” taxation—matching import rates imposed by other countries—but hinted that a softer approach might be considered.
“The full extent and scale of the tariffs are still uncertain, and there’s the potential for a tit-for-tat escalation post-announcement, possibly leading to further market volatility,” stated a global equities chief at a wealth management firm.
Stock gains on Monday were widespread, with 84% of S&P 500 stocks ending the day in green. Technology stocks were notably instrumental in driving the market’s movement, given their significant impact on broader market trends.
Nvidia’s stock increased by 3.2%, while Apple saw gains of 1.1%. Tesla surged by 11.9%, marking the highest gain among S&P 500 stocks, despite the electric vehicle manufacturer being down roughly 31% for the year amid concerns about CEO Elon Musk’s fiscal policies.
In contrast, 23andme, a genetic testing company, saw more than half of its value wiped out after announcing voluntary bankruptcy proceedings over the weekend. Meanwhile, building materials company AZEK Co. experienced a 17.3% jump after announcing its acquisition by Australia’s James Hardie Industries in a cash-and-stock deal worth approximately $8.75 billion. This follows another significant sector deal, with QXO Inc. announcing its purchase of Beacon Roofing Supply Inc., valued around $11 billion, including debt.
Overall, the S&P 500 climbed 100.01 points to reach 5,767.57. The Dow rose by 597.97 points to 42,583,32. The Nasdaq also increased, adding 404.54 points to close at 18,188.59. In the bond market, Treasury yields advanced; the yield on the 10-year Treasury increased to 4.34% from 4.25% late on Friday.
European markets generally finished lower, while Asian indexes showed mixed results. In China, Premier Li Qiang adopted a conciliatory stance during discussions with business leaders and a U.S. senator supportive of President Trump, marking the senator’s first visit to Beijing since Trump took office.
This week, Wall Street awaits several economic updates. On Tuesday, The Conference Board will publish its consumer confidence survey for March, which is anticipated to reflect a slight decrease in consumer sentiment. Furthermore, the U.S. government will release the February report on the personal consumption expenditures price index, a key inflation measure monitored by the Federal Reserve, on Friday.
Although recent reports indicate a robust underlying economy, they also show that consumer confidence is wavering, with inflation remaining persistent. This persistent inflation has led the Fed to exercise caution, having begun interest rate cuts at the end of 2024 after earlier rate hikes aimed at curbing inflation from a two-decade high. Various inflation indicators reveal that interest rates are marginally above the Fed’s target of 2%. With the U.S. trade tensions potentially reigniting inflation, the Fed is hesitating to cut rates further to observe how the economy adjusts.
Lower interest rates can lower borrowing costs and potentially stimulate the economy, but they can also contribute to heightened inflation levels.
