Wall Street Rebounds as Nasdaq, S&P 500, and Dow Surge on Tariff Delay and Fed Watch
Nasdaq, S&P 500, Dow Rally on Trump’s EU Shift and Fed Doves
U.S. equity futures ripped higher Tuesday morning, igniting a powerful rebound across indices as President Trump confirmed he would delay the proposed 50% tariff on the European Union until July 9. The Dow Jones Industrial Average futures soared +528 points, or +1.27%, to 42,202, while the S&P 500 futures added +81 points or +1.39%, to 5,898, and the Nasdaq 100 futures surged +306 points, up +1.46%, to 21,281.75. The sudden shift in trade rhetoric from escalation to negotiation allowed global markets to exhale after last week’s tariff-driven selloff, where all three U.S. benchmarks fell more than 2%.
European markets followed suit, with Germany’s DAX hitting a new all-time high intraday. Japan’s Nikkei 225 gained +0.51%, while the S&P/ASX 200 in Australia climbed +0.56% to close at 8,407.6—marking its third straight day of gains. Meanwhile, the WSJ Dollar Index ticked higher by +0.36% to 95.67, rebounding from Friday’s lowest close since September, while U.S. Treasury yields slipped, with the 10-year yield easing to 4.484%, reflecting heavy demand for long-dated bonds.
Tech Stocks Lead: Nvidia, Tesla, Informatica, Apple, AMD All Higher
All eyes now turn to Nvidia (NASDAQ:NVDA), which reports earnings Wednesday. Shares jumped +2.5% in premarket trading, extending leadership among the “Magnificent Seven.” Other semis joined the rally: Marvell Technology (NASDAQ:MRVL), Broadcom (NASDAQ:AVGO), ARM Holdings (NASDAQ:ARM), Micron (NASDAQ:MU), and Advanced Micro Devices (NASDAQ:AMD) all traded in the green. Apple (NASDAQ:AAPL) rose +1.7%, snapping an 8-day losing streak that saw shares fall more than 6%, amid fears of EU tariff exposure and declining iPhone sales.
Elsewhere, Tesla (NASDAQ:TSLA) shares bounced over +2%, lifted by comments from CEO Elon Musk, who told followers he’s refocusing entirely on Tesla, xAI, and the upcoming Starship launch. That pivot away from political distraction helped soothe investor worries, especially as Tesla’s EU sales have plunged 49% year-to-date, challenged by aggressive gains from BYD (HK:1211) and new tariffs on foreign-made EVs.
In a surprise M&A move, Salesforce (NYSE:CRM) announced an $8 billion deal to acquire Informatica (NYSE:INFA). Informatica soared +6%, while Salesforce added +1%, helping further boost large-cap tech momentum.
Fed Signals Mixed as Kashkari Calls for Patience on Rates
With trade tensions subsiding—at least temporarily—attention pivots back to monetary policy. Minneapolis Fed President Neel Kashkari urged caution on Tuesday, stating the Fed should hold rates steady until the inflationary impact of Trump’s tariffs is better understood. “A large increase in tariffs will increase inflation and decrease economic activity,” he warned, adding, “We have to pick one: fight inflation or support growth?”
This week’s economic slate includes Durable Goods Orders (Wednesday), GDP revision (Thursday), and most importantly, April PCE inflation (Friday)—the Fed’s preferred inflation metric. The FOMC minutes, also set for release Wednesday, could confirm whether central bankers are increasingly leaning toward rate cuts in Q3 2025, particularly with fiscal headwinds and tariff uncertainty rising.
PDD Holdings Collapses on Tariff Risks and Slowing Growth
Chinese e-commerce heavyweight PDD Holdings (NASDAQ:PDD) cratered more than -20% premarket after reporting weak Q1 results. Revenues rose to 95.67 billion yuan (~$13.3 billion), missing expectations, while net profit fell to 14.7 billion yuan, marking the slowest growth in three years. The company blamed Trump’s decision to end tariff exemptions for small-value goods and rising support costs for its merchants.
The miss triggered fears that rising trade barriers could cripple PDD’s U.S.-facing platforms like Temu, which had already halted shipments from China to avoid new duties. The selloff in PDD spilled into other Chinese names, adding pressure to Alibaba (NYSE:BABA) and JD.com (NASDAQ:JD), despite broader market strength.
Bond Market Repricing: Global Duration Rally Signals Risk-Off Rotation
Away from equities, long-duration sovereign bonds ripped higher globally. In Japan, 40-year government bond yields plunged -0.231%, while 30-year Japanese debt dropped -0.190%. U.S. Treasurys followed, with the 30-year yield retreating to 4.991%, and Germany’s 30-year bund fell -0.047% to 3.014%.
The sudden appetite for duration is rooted in both central bank patience and growing expectations of a global economic slowdown should tariff tensions re-escalate. Japan’s finance ministry confirmed it’s considering trimming long-bond issuance after asking market participants for feedback, potentially reducing supply and further driving down yields.
S&P 500 Earnings Wrap: 78% Beat Rate, Nvidia and Costco Still to Come
Despite macro turbulence, earnings season has been remarkably resilient. With over 95% of S&P 500 companies reporting, 78% have topped analyst expectations, according to FactSet. This week, traders are watching Okta (NASDAQ:OKTA), Costco (NASDAQ:COST), Macy’s (NYSE:M), and of course Nvidia, whose report may dictate whether Nasdaq Composite resumes its upward climb after last week’s -2.5% drop.
Asia Mixed as Trade War Risks Linger Over Markets
Markets across Asia delivered a mixed session, caught between Trump’s tariff reprieve and lingering fears of long-term fragmentation in global trade. Japan’s Nikkei 225 gained +0.51% to close at 37,724.11, while South Korea’s Kospi slipped -0.27% to 2,637.22. China’s CSI 300 dropped -0.54%, though Hong Kong’s Hang Seng Index climbed +0.43% to 23,381.99, amid slightly better industrial profit data. India’s Sensex fell -0.79% as markets weighed renewed U.S. tariff threats on software and IT services.
Tariff Truce or Delayed Shock? Traders Watch July 9 Like a Hawk
Markets may be rallying today, but the clock is ticking. President Trump’s promise to delay the 50% tariff on the EU until July 9 gives only a narrow 43-day window to avoid another economic shock. If no deal is struck, everything from Apple’s (NASDAQ:AAPL) iPhones to BMWs could face punishing levies. Analysts warn that this artificial calm could quickly unravel if negotiations falter.
Until then, expect more volatility, heavy positioning into tech earnings, and tight scrutiny of inflation and employment data. The S&P 500 (INDEXSP:.INX) currently trades just under 5,900, still well within reach of a breakout—or a fresh tariff-induced retracement. Traders aren’t chasing yet, but the tone has shifted from panic to cautious optimism. For now.
