Topline
Each of the three major U.S. stock indexes jumped Tuesday, as some of the “magnificent seven” stocks like Nvidia and Tesla headlined a broader market rally, following President Donald Trump’s announcement he would postpone 50% tariffs on the European Union.
Nvidia’s shares surged Tuesday morning, leading the “magnificent seven” stocks.
AFP via Getty Images
Key Facts
The Dow increased by more than 710 points, or about 1.7%, while the S&P 500 added 1.9% and the Nasdaq jumped by nearly 2.4%, after each of the indexes fell by more than 2% last week.
Nvidia increased by more than 3% by Tuesday afternoon, as investors appeared optimistic for the firm’s earnings report Wednesday, followed by rising share prices among other magnificent seven stocks: Apple (2.6%), Microsoft (1.0%), Meta (2.3%), Amazon (2.4%) and Alphabet (2.5%).
Shares of Tesla, another magnificent seven member, rose by 6.7%, the largest jump for the automaker since an earlier 6.7% increase on May 12.
Long-term treasury yields also fell Tuesday, with 30-year bonds falling below 5% after sitting near a two-year high for most of last week, while 10-year yields dropped more than 1.6%.
On Friday, Trump threatened to impose 50% tariffs on imports from the EU starting June 1, though he later paused the levies for the bloc until July 9, saying Sunday he would “rapidly get together” with the bloc’s leadership to “see if we can work something out.”
What Has Trump Said About Latest Tariff Negotiations With The Eu?
Trump wrote on Truth Social Tuesday he was “extremely satisfied” with imposing a 50% tariff on the EU, though he said he was informed the bloc has “called to quickly establish meeting dates.” He added, “This is a positive event, and I hope that they will, FINALLY, like my same demand to China, open up the European nations for trade with the [U.S.].”
What To Watch For
Nvidia is scheduled to release its first-quarter earnings report after markets close on Wednesday, becoming the last of the magnificent seven to report results this year. The chip maker is expected to show earnings per share of $0.88 with a revenue of $43.3 billion, according to FactSet, after Nvidia reported earnings of $0.61 per share and revenue of $26 billion over the same period last year.
Tangent
Shares of Tesla rose Tuesday after CEO Elon Musk signaled last week he would be going “back to spending 24/7 at work,” noting he must be “super focused on X/xAI and Tesla.” Earlier this month, Musk said he was committed to being Tesla’s chief executive for the next five years, a further denial of reports suggesting the automaker’s board was searching for his replacement. Following concerns Musk was spending too much time working as head of the Department of Government Efficiency, Wedbush analyst Dan Ives wrote Musk needed to “take a step back” from the agency, as “Tesla’s future depends on it.”
Key Background
A surge in trading follows a losing streak for the three major market indexes amid growing deficit concerns and Trump’s increased tariff threats. Trump wrote on Truth Social saying he would push for 50% levies on the EU, claiming the bloc was “taking advantage of the [U.S.] on trade” and had been “very difficult to deal with” in trade negotiations. He also said a 25% tariff “must be paid” by Apple on iPhones unless the company shifts its manufacturing of the devices to the U.S., not “India or anyplace else.” A broader market selloff was backed by the financial ratings agency Moody’s downgrading the U.S. government’s credit rating, leading 30-year Treasury yields to hit their highest mark since October 2023. An auction last Wednesday for 20-year bonds fell below expectations for the Treasury Department, with investors accepting the highest rate for the long-term notes in nearly two years.