Major United States benchmark averages posted a positive session on Monday (Tuesday AEST), led by a strong rebound in technology shares after President Donald Trump unexpectedly exempted a range of consumer electronics from newly proposed tariffs.
The Dow Jones Industrial Average rose 312.1 points or 0.8% to 40,524.8, the S&P 500 gained 42.6 points or 0.8% to finish at 5,406.0, while the Nasdaq Composite added 107.0 or 0.6% to end at 16,831.48.
The gains came after the Trump administration suspended a tariff increase of 125% on smartphones, computers, semiconductors, and related components would be excluded from the new "reciprocal" tariffs unveiled by President Trump earlier this month.
However, uncertainty remained after both Trump and Commerce Secretary Howard Lutnick suggested on Sunday that the exemptions could be temporary.
In a post on Truth Social, Trump stated that these products are still “subject to the existing 20% Fentanyl Tariffs, and they are just moving to a different Tariff ‘bucket’”.
The market welcomed the exemptions, particularly as major technology companies had faced selling pressure in recent sessions. Apple shares climbed 2.2% on the news, while Dell Technologies rose 4%.
Automakers also gained as Trump said he is looking to “help some of the car companies” amid his 25% auto tariffs. Rivian popped 4.9%, Ford rallied 4.1%, and General Motors gained 3.5%.
Adding to the cautious optimism, Federal Reserve Governor Christopher Waller commented on the inflationary impact of the new tariffs, noting an expectation that any price increases will be “transitory”.
Waller laid out two scenarios: under more extensive tariffs, inflation could temporarily rise to 4 - 5% before easing as growth slows and unemployment rises. A more limited tariff impact would push inflation to around 3% before subsiding.
Despite last week’s rebound and Monday’s gains, all three major indices remain sharply lower since the tariff measures were first announced on 2 April. The S&P 500 has lost 4.7%, while the Nasdaq and Dow are down roughly 4.4% and 4%, respectively.
On the bond markets, 10-year and 2-year rates were down 1.3% and 3.1% to 4.813% and 3.853%, respectively.
