US stocks gave back early gains on Monday afternoon as markets remained on edge over Donald Trump’s trade policies despite new lenience over the weekend on electronics tariffs.
The S&P 500 and Nasdaq Composite were up only slightly, after climbing 1.7 per cent and 2.3 per cent higher in morning trading, respectively.
Equities ceded earlier gains as Trump spoke about US border policies and aid to Ukraine in its war with Russia while fielding questions in the Oval Office.
“The markets have been very strong once they got used to it,” Trump said. “I gave them a little bit of a pause, because, you know, you have to show a little flexibility, but we go back to what we have to do.”
European stocks made strong gains, as the Trump administration’s proposed tariff exemptions offered investors hope of some relief in the trade war.
Europe’s benchmark Stoxx Europe 600 gained 2.7 per cent on Monday, while the UK’s blue-chip FTSE 100 climbed 2.1 per cent. The European rally was broad based, with banking stocks posting the biggest gains.
But investors are far from confident that the volatile market moves are over. “Gains like today can evaporate quite quickly, so we’re quite cautious,” said Max Kettner, chief multi-asset strategist at HSBC.
“I’m not sure how much longevity I’ll give [the rally],” he added. “Who knows what the next announcement will be.”
The gains came after the White House late on Friday excluded smartphones and other consumer electronics from steep tariffs introduced this month. On Sunday, however, administration officials warned that the reprieve would be temporary.
Mr Trump’s erratic tariff swerves have driven huge volatility in markets in recent weeks, with his decision last Wednesday to pause “reciprocal” levies on most countries other than China sparking a huge rally in US equities.
“While uncertainty over Trump’s tariffs is far from over, we think the pause [on key tech products] indicates a sensitivity to market stress from the administration,” said Ulrike Hoffmann-Burchardi, chief investment officer for global equities at UBS Global Wealth Management.
Technology stocks had earlier led the advance, with Apple’s share price jumping 7.5 per cent at the market open in the US, losing some of those gains to trade at 5.3 per cent higher by mid-morning in New York.
Mr Trump and Howard Lutnick, US commerce secretary, on Sunday indicated that consumer electronics would instead be subject to a separate duty the White House was preparing for semiconductors.
It was unclear what level the chips tariffs would be set at, but other duties the Trump administration has imposed on individual sectors such as steel and aluminium suggest they could be substantially lower than the levies currently imposed on China.
The early lift in US markets followed earlier gains in Europe and Asia. Europe’s benchmark Stoxx Europe 600 gained 2.5 per cent by afternoon trading in Europe, while the UK’s blue-chip FTSE 100 climbed 2 per cent. Dutch chipmakers Besi and ASML were up 4.5 per cent and 3.5 per cent respectively by the afternoon in Europe.
In comments to journalists on Air Force One on Sunday, Trump said his administration would show “flexibility” for some products and signalled that it would be speaking to key companies to discuss the tariffs.
Asked what the semiconductor levy rate would be, he told reporters he would “be announcing it over the next week”.
Mr Trump’s sweeping tariffs, announced at a “liberation day” event this month, unleashed turmoil across financial markets and sparked fears of a global recession. But stocks rallied at the end of the week, after Trump’s decision to put a 90-day pause on big “reciprocal” tariffs for most countries fed optimism that the worst-case trade scenario could be avoided.
The prospect of lower tariffs on popular consumer electronics would be a boost for Apple and other tech groups that rely heavily on Chinese factories to make iPhones and other goods.
“We might be past peak tariff fear,” said Michael Metcalfe, head of macro strategy at State Street Global Markets, adding that the new exemptions were a “reasonably significant backing off” on the level of tariffs expected at the end of last week.
Haven assets were steady. Gold touched a fresh record high of just over $3,245 per troy ounce on Monday morning, before giving up its gains.
Markets in Asia rebounded, led by Hong Kong’s Hang Seng index up 2.4 per cent, Japan’s Nikkei 225 rising 1.2 per cent and the broad Topix up 0.9 per cent.
China’s mainland CSI 300 rose 0.2 per cent as official data showed exports from the world’s second-largest economy leapt last month amid a rush to dispatch shipments before tariffs took effect.
Exports rose 12.4 per cent in US dollar terms in March on a year earlier, figures from China’s customs administration showed on Monday, well above expectations and the biggest rise since October.
Imports fell 4.3 per cent, a less steep contraction than the 8.4 per cent fall in the January-February period. - Copyright The Financial Times Limited 2025
