[New York Stock Market] Rally on Trump's "Mutual Tariff Exemption" Remark... Nasdaq Surges 2.3%

Trump: "We May Exempt Many Countries from Reciprocal Tariffs"
Tech Stocks Surge on Hopes for Flexible Tariff Policy
This Week's Focus: February PCE Inflation and Consumer Confidence Index

The three major indices of the U.S. New York stock market rallied on the 24th (local time). Market concerns over a tariff-induced recession eased as U.S. President Donald Trump announced the possibility of granting reciprocal tariff exemptions to many countries. Buying surged mainly in tech stocks, with the Nasdaq index jumping more than 2%.

Reuters Yonhap News

On that day in the New York stock market, the blue-chip-focused Dow Jones Industrial Average (Dow) closed at 42,583.32, up 597.97 points (1.42%) from the previous trading day. The large-cap-focused S&P 500 index rose 100.01 points (1.76%) to 5,767.57, and the tech-heavy Nasdaq index soared 404.54 points (2.27%) to close at 18,188.59.

By individual stocks, tech shares surged, driving the market higher. U.S. electric vehicle maker Tesla soared 11.9%. Meta, Facebook’s parent company, rose 3.72%, and AI leader Nvidia gained 3.15%. U.S. semiconductor design firm AMD and AI platform company Palantir jumped 6.98% and 6.37%, respectively.

President Trump’s remarks on reciprocal tariff exemptions acted as a catalyst for the sharp rise in stock prices. At an event at the White House announcing Hyundai Motor’s new $21 billion (about 31 trillion won) investment plan in the U.S. over the next four years, he responded to reporters’ questions about reciprocal tariffs by saying, "We can grant exemptions to several countries." Regarding tariffs on specific items such as automobiles, he mentioned, "We can announce it quite soon, within a few days."

As the so-called "Day of Liberation" for reciprocal tariffs approaches, local media have been reporting that the scope and targets of tariff imposition will be narrower than expected. The Wall Street Journal (WSJ) reported the previous day that the Trump administration has decided to delay item-specific tariffs and start with reciprocal tariffs. Initially, President Trump had announced that on May 2, he would simultaneously announce tariffs on specific items such as automobiles and semiconductors along with reciprocal tariffs. Bloomberg News reported that President Trump will exclude some countries from tariffs. It is speculated that the Trump administration will focus reciprocal tariffs on the so-called "Dirty 15" countries with large U.S. trade deficits, including South Korea. On the 21st, President Trump also said regarding reciprocal tariffs, "There will be flexibility, but basically it will be reciprocity," and this mention of "flexibility" is analyzed to have eased investors’ concerns. Following this remark, the New York stock market ended a four-week losing streak last week and turned to gains, continuing the rebound trend on the first trading day of this week.

Charlie Ripley, Chief Investment Strategist at Allianz Investment Management, said, "As concerns about reciprocal tariffs have somewhat eased, market conditions are dramatically improving. While there has always been concern about expansion or retaliation in terms of risk, if the (Trump) administration implements more targeted and tactical plans for tariff enforcement, the risk of a full-scale trade war will decrease."

With the announcement of reciprocal tariffs just over a week away, Wall Street is focusing on tariff-related remarks from President Trump and his aides.

In recent weeks, concerns about a recession due to tariff uncertainty have spread, drawing attention to key economic indicators. On the morning of the same day, S&P Global released the March Composite Purchasing Managers’ Index (PMI), which came in at 53.5, significantly higher than the February figure of 51.6. A reading above 50 indicates economic expansion, while below 50 indicates contraction. The services PMI rose to 54.3, exceeding both the forecast (51.2) and February’s 51.0, pushing the composite PMI higher. However, the manufacturing PMI fell from 52.7 in February to 49.8 in March, signaling a shift to contraction. It also fell well below the market expectation of 51.9, indicating that the manufacturing sector is contracting faster than expected.

Several other economic indicators will be released this week. The most important is the core Personal Consumption Expenditures (PCE) price index for February, to be released by the U.S. Department of Commerce on the 28th. According to Bloomberg’s forecast, the core PCE price index is expected to rise 2.7% year-over-year, up from 2.6% in January. Prior to that, on the 25th, the Conference Board’s (CB) March Consumer Confidence Index will be announced. Weekly initial jobless claims, reflecting labor market conditions, and the finalized GDP growth rate for Q4 of last year will be released on the 27th.

Bond yields are on the rise. The 10-year U.S. Treasury yield, a global bond yield benchmark, rose 8 basis points (1 bp = 0.01 percentage points) from the previous trading day to 4.33%, while the 2-year U.S. Treasury yield, sensitive to monetary policy, climbed 9 basis points to 4.04%.