Trump's Delay Of EU Tariffs Likely To Spark Rally On Wall Street

(RTTNews) - The major U.S. index futures are currently pointing to a sharply higher open on Tuesday, with stocks likely to regain ground following the steep drop seen last week.

The upward momentum on Wall Street comes after President Donald Trump announced he is delaying a threatened 50 percent tariff on imports from the European Union.

"I received a call today from Ursula von der Leyen, President of the European Commission, requesting an extension on the June 1st deadline on the 50% Tariff with respect to Trade and the European Union," Trump said in a post on Truth Social on Sunday.

"I agreed to the extension — July 9, 2025 — It was my privilege to do so," he added. "The Commission President said that talks will begin rapidly."

The move by Trump comes as analysts previously suggested the threatened tariff on the EU was just a negotiating tactic and not where the eventual rate will wind up.

Meanwhile, traders are also looking ahead to earnings news from Nvidia (NVDA), with the AI daring scheduled to release its fiscal first quarter results after the close of trading on Wednesday.

Stocks moved sharply lower in early trading on Friday but regained some ground over the course of the session. While the major averages climbed well off their worst levels of the day, they still closed firmly in negative territory.

The tech-heavy Nasdaq tumbled as much as 1.7 percent early in the session before ending the day down 188.53 points or 1.0 percent at 18,737.21. The S&P 500 also slid 39.19 points or 0.7 percent to 5,802.82 and the Dow fell 256.02 points or 0.6 percent at 41,603.07.

For the week, the S&P 500 gave up 2.6 percent, while the Nasdaq and the Dow both plunged by 2.5 percent.

The initial slump on Wall Street came after Trump threatened to impose 50 percent tariffs on imports from the European Union beginning June 1st.

Trump claimed in a post on Truth Social that the EU has "been very difficult to deal with" and said trade talks with the bloc are "going nowhere!"

In a separate Truth Social, Trump also threatened to impose a 25 percent tariff on Apple (AAPL) iPhones that are not manufactured in the U.S. Shares of Apple tumbled by 3.0 percent following the news.

Trump's threats led to renewed to trade concerns, which had waned considerably in recent weeks after the U.S. reached trade deals with the U.K. and China.

On the U.S. economic front, the Commerce Department released a report showing new home sales in the U.S. in the month of April spiked compared to a significantly downwardly revised level in March.

The report said new home sales soared by 10.9 percent to an annual rate of 743,000 in April after jumping by 2.6 percent to a downwardly revised rate of 670,000 in March.

Economists had expected new home sales to tumble by 4.4 percent to a rate of 692,000 from the 724,000 originally reported for the previous month.

Semiconductor stocks turned in some of the market's worst performances on the day, dragging the Philadelphia Semiconductor Index down by 1.5 percent.

Notable weakness was also visible among networking stocks, as reflected by the 1.0 percent loss posted by the NYSE Arca Networking Index.

Retail, computer hardware and software stocks also moved to the downside, while gold stocks moved sharply higher along with the price of the precious metal.

Commodity, Currency Markets

Crude oil futures are falling $0.49 to $61.04 a barrel after rising $0.33 to $61.53 a barrel last Friday. Meanwhile, after soaring $70.80 to $3,365.80 an ounce in the previous session, gold futures are plunging $73.60 to $3,292.20 an ounce.

On the currency front, the U.S. dollar is trading at 144.08 yen versus the 142.85 yen it fetched on Monday. Against the euro, the dollar is trading at $1.1363 compared to yesterday's $1.1387.

Asia

Asian shares fluctuated before ending mixed on Tuesday as investors awaited new tariff updates and assessed the impact of U.S. President Donald Trump's policies on global growth. Investors also reacted to rising Covid-19 cases across Southeast Asia.

The dollar drifted lower due to fiscal and trade jitters, while gold eased from a two-week high and oil was little changed in Asian trading.

China's Shanghai Composite Index slipped 0.2 percent to 3,340.69 despite industrial firms reporting faster profit growth in April. EV maker BYD fell 2.3 percent to extend losses from the previous session after announcing steep discounts across several models.

The yuan slipped against the dollar despite reports that the People's Bank of China has asked major lenders to raise the share of yuan when facilitating cross-border trade.

Hong Kong's Hang Seng Index closed up 0.4 percent at 23,381.99, reversing early losses ahead of upcoming China PMI data.

Moody's has affirmed China's A1 sovereign credit rating with a negative outlook but flagged risks from weak consumption and trade war volatility.

Japanese markets reversed course to end higher as the yen weakened and yields fell on super long-dated bonds ahead of a bond auction, with media reports suggesting that the finance ministry might issue fewer super-long bonds.

The Nikkei 225 Index rose 0.5 percent to 37,724.11, while the broader Topix Index settled 0.6 percent higher at 2,769.49. Recruit Holdings, Sony and SoftBank Group all gained around 2 percent.

Seoul stocks ended lower as investors locked in profits from recent gains. The Kospi dipped 0.3 percent to 2,637.22, with tech stocks falling on renewed concerns over the U.S. tariff policies.

Australian markets ended higher after a weak start. The benchmark S&P ASX 200 Index climbed 0.6 percent to 8,407.60, while the broader All Ordinaries Index ended half a percent higher at 8,631.50.

IT stocks, financials and industrial logged strong gains as weaker iron ore and gold prices weighed on the mining sector.

WiseTech Global jumped 2.2 percent to extend gains for a second straight session after announcing it would buy U.S.-based cloud logistics provider E2open.

Across the Tasman, New Zealand's benchmark S&P NZX-50 Index edged up by 0.3 percent to 12,582.33.

Europe

European stocks have moved higher on Tuesday amid continued optimism surrounding the delay of U.S. President Donald Trump's proposed 50 percent tariff on EU imports.

There was some cheer on the data front, with the German consumer sentiment index, published by GfK market research institute and the Nuremberg Institute for Market Decisions, rising for a third straight month. The forward-looking index rose by 0.9 points month on month to -19.9 points.

Elsewhere, preliminary data showed French consumer price index rose 0.7 percent on a yearly basis in May, slower than the 0.8 percent stable increase seen in April amid a slowdown in costs for services and a continued fall in energy prices.

This was the lowest inflation rate since February 2021, when prices had risen 0.6 percent.

While the French CAC 40 Index is up by 0.2 percent, the U.K.'s FTSE 100 Index and the German DAX Index are both up by 0.7 percent.

The euro was under pressure following dovish commentary from ECB policymakers.

Defense stocks were in the spotlight after Trump threatened additional sanctions on Russia.

Automakers BMW, Mercedes Benz and Volkswagen were modestly higher despite industry data showing that new car sales fell 1.2 percent in the year-to-date period compared to the previous year.

Sanofi was moving higher in Paris after completing the acquisition of DR-0201, a targeted bispecific myeloid cell engager, from Dren Bio, Inc.

AstraZeneca gained more than 1 percent after its Imfinzi gained EU approval for treating muscle-invasive bladder cancer.

Elementis soared 13 percent. The global specialty company has finalized the sale of its Talc business to IMI Fabi S.p.A for $121 million.

Premier Inn owner Whitbread advanced 1.5 percent as it announced Christine Hodgson as the new Chair starting September 1, 2025.

U.S. Economic News

With orders for transportation equipment pulling back sharply, the Commerce Department released a report on Tuesday showing a steep drop by new orders for U.S. manufactured durable goods in the month of April.

The Commerce Department said durable goods orders plunged by 6.3 percent in April after surging by a downwardly revised 7.6 percent in March.

Economists had expected durable goods orders to plummet by 7.9 percent compared to the 9.2 percent spike that had been reported for the previous month.

Meanwhile, excluding a 17.1 percent nosedive by orders for transportation equipment, durable goods orders rose by 0.2 percent in May after dipping by 0.2 percent in April. Ex-transportation orders were expected to edge down by 0.1 percent.

At 9 am ET, Standard & Poor's is due to release its report on home prices in major metropolitan areas in the month of March.

Richmond Federal Reserve President Thomas Barkin is scheduled to be interviewed on Bloomberg Television at 9:30 am ET.

At 10 am ET, the Conference Board is scheduled to release its report on consumer confidence in the month of May. The consumer confidence index is expected to inch up to 87.3 in May after plunging to 86.0 in April.

New York Federal Reserve President John Williams is due to participate in a moderated discussion panel before the Bank of Japan Institute for Monetary and Economic Studies Conference at 8 pm ET.