Markets rebound as Trump eases EU tariff threats

U.S. stock futures surged early Tuesday, signaling a sharp rebound from last week’s market decline. The S&P 500 rose about 1.4%, Nasdaq futures jumped 1.5%, and the Dow climbed more than 1%. The primary driver behind this rally was President Donald Trump’s announcement to postpone a planned 50% tariff hike on European imports, opting instead to pursue accelerated trade discussions with the European Union.

This change in direction came after a weekend phone call with European Commission President Ursula von der Leyen. The shift was particularly notable following Friday’s confrontational remarks, which included threats against Apple over its foreign-assembled iPhones.

However, describing this as a step forward in diplomacy may be misleading. Trump had initially triggered tensions by threatening the tariffs effectively generating a trade crisis and now frames the postponement as a strategic concession. In reality, he is simply walking back his own aggressive proposal.

Adding to the confusion, Trump initially singled out Apple with a proposed 25% tariff on iPhones not manufactured in the U.S., a move that critics argued would unfairly favor foreign competitors like Samsung. This backlash prompted Trump to include Samsung in the tariff threats as well, after significant criticism online.

Despite the market boost, uncertainty lingers. Investors remain wary due to the administration's frequent policy shifts, which have repeatedly unsettled financial markets in 2025. The current market rally is tied to hopes that talks with the EU will lead to a resolution by July 9 the new deadline Trump has set for implementing tariffs.

For now, investor optimism is bolstered by rising bond prices and anticipation that the trade dispute may be resolved through dialogue rather than escalation.

Looking ahead, other major market catalysts are on the horizon. Nvidia, a key player in semiconductors and artificial intelligence, will report earnings Wednesday. Its performance is expected to influence investor sentiment significantly. Also due Wednesday is the release of minutes from the Federal Reserve’s May meeting. While no surprises are anticipated, analysts will closely examine the language for hints about future inflation trends and possible interest rate cuts later this year.