[New York Stock Exchange] Trump’s 'EU Tariff Delay' and Improved Consumer Sentiment Drive Surge... Tesla Up 7%

Dow and S&P 500 Rebound After Five Days
Trump's Postponement of 50% EU Tariff Spurs Buying
Treasury Yields Fall... 10-Year at 4.45%
Tesla Soars 7% After Musk Says He Will "Focus on the Company"
Nvidia Earnings on the 28th, PCE Price Index Release on the 30th

On May 27 (local time), the three major indices of the New York Stock Exchange closed sharply higher on the first trading day of the week following the previous day's Memorial Day holiday. Investors, relieved of concerns over a tariff war after U.S. President Donald Trump decided to postpone the 50% tariff on the European Union (EU) that was scheduled for next month until early July, rushed to buy stocks, particularly in the technology sector. Improved consumer sentiment among Americans also served as a catalyst for the rise in stock prices.

AFP Yonhap News

On this day, the Dow Jones Industrial Average, which is focused on blue-chip stocks, closed at 42,343.65, up 740.58 points (1.78%) from the previous trading day. The S&P 500 index, which is centered on large-cap stocks, rose by 118.72 points (2.05%) to 5,921.54, while the tech-heavy Nasdaq index jumped 461.96 points (2.47%) to close at 19,199.16. With this, both the Dow and S&P 500 succeeded in rebounding after five days.

President Trump announced on May 25 that, at the request of Ursula von der Leyen, President of the European Commission, 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% base tariff that the U.S. 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 "we expect several additional negotiations this week." Optimism over a trade deal also significantly improved consumer sentiment. According to the Conference Board (CB), the Consumer Confidence Index for May recorded 98, a sharp increase of 12.3 points from April's 85.7, and far exceeding market expectations of 87.1. This is seen as a result of growing optimism about trade negotiations after the U.S. and China agreed on May 12 to each lower their tariff rates by 1.15 percentage points.

The sharp rally in the stock market came as the market had been sluggish the previous week. Earlier, after global credit rating agency Moody's downgraded the U.S. credit rating due to government debt issues, concerns about a worsening fiscal deficit intensified when President Trump's major tax cut plan passed the House of Representatives. As the surge in U.S. Treasury yields has temporarily subsided and fears over the tariff war have eased, the market has become more active at the start of this week.

Dan Ryan, managing partner at Sincerus Advisory, said, "The long holiday seems to have created the momentum for today's surge," and added, "With the easing of heightened trade tensions, the (stock market) express train is about to arrive."

However, there are still warnings to remain cautious about tariff uncertainties. 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 stock valuations, it is still concerning to chase the S&P 500 index." He added, "Not all of Trump's most exaggerated tariff threats will become reality, but he has imposed significant import tariffs over the past four months, and it is probably not 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 (Fed) considers most important, 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 on May 29, one day earlier. The U.S. announces its economic growth rate in three stages: advance, preliminary, and final estimates. The preliminary estimate is expected to show an annualized quarter-on-quarter rate of -0.3%, the same as the advance estimate. The minutes of the Federal Open Market Committee (FOMC) will also be released on May 28, after the Fed kept its benchmark interest rate unchanged earlier this month. Nvidia will announce its financial results for the first quarter (February to April) of the 2026 fiscal year on the same day.

U.S. Treasury yields are on the decline. The 10-year U.S. Treasury yield, the global benchmark for bond yields, is down 5 basis points (1bp=0.01 percentage point) from the previous day, at 4.45%. The 30-year U.S. Treasury yield is trading at 4.95%, down 8 basis points from the previous day. The 2-year U.S. Treasury yield, which is sensitive to monetary policy, is hovering at around 3.98%, the same level as the previous trading day.

By sector, technology stocks showed strong gains. Tesla surged 6.94% after CEO Elon Musk announced over the weekend that he would focus on the company. Nvidia jumped 3.21%, and Apple climbed 2.53%. US Steel rose 1.98% after news that Nippon Steel would complete its acquisition at $55 per share.