Investors forgot about their debt and deficit fears—if only for a moment—on Tuesday. Rested and recharged after their Memorial Day barbeques and, more importantly, happy over U.S. President Donald Trump’s Sunday announcement that he would delay a threatened 50% tariff on EU goods until July 9 to allow for more negotiations, they sent U.S. stock futures upward.
S&P 500 futures rose some 1.4%, while Nasdaq futures jumped 1.5% and Dow futures rose 1.2% premarket. Individually, Tesla and Nvidia were up about 2.6% premarket—despìte Tesla’s 49% year-over-year Europe sales drop in April—while Trump Media jumped over 9% on an FT report it would raise $3 billion to buy crypto.
However, the jump was not as pronounced as some earlier leaps prompted by tariff walkbacks. Investor sadness about Trump’s regular tariff threats and then joy at his walkbacks have become a common market fixture in recent months, and the falls and rises appear to be losing force with each repetition.
“Investors know this act by heart,” Stephen Innes of SPI Asset Management wrote in a note seen by AP. “The volatility is still there, but like a horror franchise on its fifth sequel, the jump scares are losing their bite. Panic-selling into a Trump pirouette doesn’t pay like it used to — markets have seen this dance before.”
But will the walkback last, or is it just a temporary reprieve?
Trump’s delay of the 50% tariffs, just days after he’d set a June 1 start date, suggest the threat was a negotiation tactic, writes George Vessey, lead FX and macro strategist at Convera. “However,” he continues, “Trump’s sharp rhetoric and unresolved trade grievances with the EU signal further escalations remain possible.”
In other words, expect another sequel in this franchise.
Here’s a snapshot of today’s action prior to the opening bell in New York:
- The S&P 500 fell 0.67% Friday, the last trading day before the long Memorial Day weekend. The index is down 1.3% YTD.
- S&P futures traded up 1.4% this morning.
- The Stoxx Europe 600 was up 0.6% in early trading.
- Asia was mixed: Japan was up 0.5%. Hong Kong rose 0.4%. Shanghai slipped 0.2% and India’s Nifty 50 fell 0.7%.
- Tesla and Nvidia were up about 2.6% premarket, while Trump Media jumped 10% on an FT report it would raise $3 billion to buy crypto.
- Bitcoin was sitting up at $109,700 this morning.
