Market Opens Strong on First Trading Day of the Week
Trump's 50% Tariff Delay on EU Welcomed by Markets
Treasury Yields Fall... 10-Year Note at 4.47%
Nvidia Earnings on May 28, PCE Inflation Data on May 30
All three major indices on the New York Stock Exchange rose on May 27 (local time), which was the first trading day of the week following Memorial Day. Investors, relieved of concerns over trade tensions, began buying stocks after U.S. President Donald Trump decided to postpone the 50% tariff on the European Union (EU) that was originally scheduled to take effect next month, delaying it until early July.
As of 9:48 a.m. on the New York Stock Exchange, the blue-chip Dow Jones Industrial Average was up 379.39 points (0.91%) from the previous trading day, standing at 41,982.46. The S&P 500, which focuses on large-cap stocks, rose 68.84 points (1.19%) to 5,871.66, while the tech-heavy Nasdaq climbed 269.65 points (1.44%) to 19,006.86.
President Trump announced on May 25 that, at the request of European Commission President Ursula von der Leyen, he would postpone the effective date of the 50% tariff on the EU from June 1 to July 9. This reversal came just two days after he had threatened to impose the 50% tariff due to a lack of progress in tariff negotiations with the EU. As a result, until July 9, the EU will only be subject to the existing 10% basic tariff that the United States has imposed globally.
The White House also hinted that an additional trade agreement was imminent. Kevin Hassett, Chairman of the U.S. National Economic Council (NEC), said in an interview with CNBC that he expects "several additional negotiations to take place this week."
Last week, the New York stock market was sluggish as concerns over the widening U.S. fiscal deficit pushed up Treasury yields. The passage of a tax cut bill containing President Trump’s key campaign pledges in the House of Representatives, combined with a downgrade of the U.S. credit rating by global ratings agency Moody’s due to government debt issues, heightened concerns over a deficit budget. However, as Treasury yields declined and fears of an escalation in the tariff war eased, the market has shown signs of recovery in the early part of this week.
However, some analysts caution that tariff uncertainties still warrant vigilance. Adam Crisafulli, founder of Vital Knowledge, said, "Given the market’s complacent attitude toward major macroeconomic risk factors such as tariffs, fiscal policy, and Treasury yields, and the high equity valuations, chasing the S&P 500 remains concerning." He also noted, "While Trump’s most exaggerated tariff threats may not all become reality, he has imposed significant import tariffs over the past four months, and this may not be over yet."
This week, key inflation indicators and Nvidia’s earnings will be released. The Personal Consumption Expenditures (PCE) price index for April, which the Federal Reserve considers the most important inflation metric, will be announced on May 30. The preliminary estimate for the U.S. gross domestic product (GDP) growth rate for the first quarter of this year will be released a day earlier, on May 29. The United States releases economic growth rates in three stages: advance, preliminary, and final estimates. The preliminary figure is expected to match the advance estimate, showing a quarter-on-quarter annualized rate of -0.3%. The minutes of the Federal Open Market Committee (FOMC) will also be released on May 28, following the Federal Reserve’s decision to keep its benchmark interest rate unchanged earlier this month. Nvidia will announce its results for the first quarter of fiscal year 2026 (February to April) on the same day.
Treasury yields are on a downward trend. The yield on the 10-year U.S. Treasury note, the global benchmark for bond yields, fell 4 basis points (1 bp = 0.01 percentage point) from the previous day to 4.47%. The yield on the 30-year U.S. Treasury note declined 5 basis points to 4.98%. The yield on the 2-year U.S. Treasury note, which is sensitive to monetary policy, is hovering around 3.98%, the same level as the previous trading day.
By sector, technology stocks are strong. Nvidia is up 2.06%. Tesla has surged 3.79%. Apple is also up 1.42%. Previously, on May 23, President Trump stated that if iPhones are not manufactured in the United States, Apple would have to pay at least a 25% tariff. In this regard, the New York Times reported that Apple CEO Tim Cook declined to accompany President Trump on his Middle East trip, which has led to significant friction between Apple and the White House.
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