US stocks end up on tariff, improved consumer confidence. Dow, S&P 500 snap losing streak
U.S. stocks closed higher, with the blue-chip Dow jumping more than 700 points, as investors cheered a delay in 50% tariffs on the European Union and data showing consumers are feeling better.
In response to a request from European Commission president Ursula von der Leyen, President Donald Trump said over the weekend he would delay the tariff to July 9 from June 1 to allow for more trade negotiations. The EU agreed to accelerate negotiations with the U.S.
The Dow rose 1.78%, or 740.58 points, to 42,343.65; the broad S&P 500 added 2.05%, or 118.72 points, to 5,921.54; and the tech-heavy Nasdaq jumped 2.47%, or 461.96 points, to 19,199.16. The benchmark 10-year yield slipped to 4.448%.
Investors were relieved the president backed off a 50% tariff, which had depressed stocks on Friday. Economists fear high tariffs will fan inflation and slow the economy, possibly pushing the U.S. into recession.
"With the EU tariff pause poised to boost the market early today, this week’s high-profile earnings, inflation data, and Senate deliberations over the tax and spending bill may determine whether the month ends on a strong note," said Chris Larkin, managing director of trading and investing at E*TRADE from Morgan Stanley.
The PCE prices index, the Federal Reserve's preferred inflation gauge, is due at 8:30 a.m. on May 30.
Further encouragement came after National Economic Council director Kevin Hassett said this morning in a CNBC interview he expects to “see a few more deals even this week.”
U.S. consumer confidence also rebounded this month on hopes for trade agreements. The Conference Board said its index rose to 98 from 85.7 a month earlier, the first increase since November.
Last but not least of the 'Magnificent Seven' to report earnings
On Wednesday, after the market closes, chip giant Nvidia is due to report results for the company's first three months of its fiscal year. It's the last of the so-called "Magnificent Seven," the biggest and most influential technology stocks, to give an earnings update. Along with Nvidia, they are Alphabet, Amazon, Apple, Meta Platforms, Microsoft and Tesla.
More than 95% of S&P 500 companies have reported this earnings season and almost 78% have surpassed analyst expectations, according to FactSet. However, analysts were more concerned about how many have issued hazy outlooks due to tariffs and deteriorating consumer confidence.
The Wall Street Journal reports that 2,136 U.S. publicly traded companies mentioned tariffs on earnings calls through Thursday. That was the most in quarterly data going back to 2016, it said.
Other big companies set to report include Costco and Dell on Thursday.
Corporate news
- PDD Holdings, parent of Temu, said its revenues in the first three months of the year missed analysts' forecasts. Shares tumbled 13.64%.
- Salesforce said it agreed to buy loud data management company Informatica in an $8 billion deal. Informatica shares jumped 6.08% and Salesforce gained 1.49%.
- Tesla shares rose 6.94% after chief executive Elon Musk said in a social media post his focus is returning to his companies. In a post on X, Musk said: “I must be super focused on /xAI and Tesla (plus Starship launch next week), as we have critical technologies rolling out.” Separately, the EV giant's European Union sales fell for a fourth straight month, new data showed.
- U.S. Steel shares gained 1.98% after CNBC reported that Japan’s Nippon Steel is expected to close its acquisition for the U.S. company at $55 per share.
Cryptocurrency
Trump Media & Technology Group shares slid 10.38% after the FT said Trump's social media firm planned to raise about $3 billion to spend on cryptocurrencies such as bitcoin.
Bitcoin was last up 0.35% at $109,838.60.
This story was updated with new information.
Medora Lee is a money, markets, and personal finance reporter at Paste BN. You can reach her at mjlee@usatoday.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday.