- The US equities soared as markets cheered the postponement of 50% tariffs on the Eurozone.
- The talks between European Commission President and US President has eased fears of trade war.
- Markets now eye key US data and FOMC meeting minutes.
The US equity futures surged on Tuesday. The move was attributed to improved risk sentiment due to President Trump’s delay to implement tequihe tariffs on Eurozone imports until July 09. The decision immediately alleviated trade tension and energized investors ahead of Wall Street’s opening after Memorial Day holiday.
The S&P 500 futures gained 1.2%, Dow Jones Industrial Average rose 1.1% and Nasdaq 100 futures rose by 1.3%. The delay in implementing the tariff follows a meeting between the US President and European Commission President Ursula von der Leyen. The extension in tariff relief an opportunity window for trade negotiations, releasing fears of trade war and its potential repercussions.
The equity markets have cheered postponement of tariffs, reducing immediate concerns of US-EU trade disputes. Now, investors eye key US data on the day including CB Consumer Confidence and US Durable Goods Orders which may provide more insight into US economy. Later this week, FOMC meeting minutes and Core PCE Index are also important to watch.
The European markets have mirrored the same sentiment with most indexes posting gains. The FTSE 100 surged 0.8% while Germany’s DAX rose 0.1%. In Asia, Japan’s Nikkei 225 reversed earlier losses and close 0.5% up, showing a broader risk-on sentiment.
The combination of delayed tariffs and favorable US economic data may boost the investors’ confidence. However, the analysts caution that going on uncertainties and geopolitics can deteriorate the sentiment. As Wall Street resumes today, market participants will be eying how these factors influence the equities.
