Global stocks edge higher after markets rally on Trump’s pause

Stocks are rising worldwide Monday after President Donald Trump relaxed some of his tariffs, for now at least, and as stress from within the US bond market seems to be easing.

The S&P 500 was 0.2% higher in afternoon trading, though trading is still shaky, and it gave back most of its bigger, early gain of 1.8%. The Dow Jones Industrial Average was up 57 points, or 0.1%, as of 12:59pm, and the Nasdaq composite fell 0.1%.

Apple and other technology companies helped lift Wall Street after Trump said he was exempting smartphones, computers and some other electronics from some of his stiff tariffs, which could ultimately more than double prices for US customers of many goods coming from China. Such an exemption should help US importers, which would not have to choose between passing on the higher costs to their customers or taking a hit to their own profits.

Apple climbed 2.1%, and Dell Technologies rose 3.5%.

Stock markets in other countries likewise bounced following the cooldown in Trump’s trade war with China, the world’s second-largest economy. Indexes climbed 2.4% in France, 2.9% in Germany, 1.2% in Japan and 1% in South Korea.

But the relief may prove fleeting, helping to lead to Monday morning’s swings. Trump’s tariff rollout broadly has been full of fits and starts, and officials in his administration said this most recent exemption on electronics is only temporary.

That could keep uncertainty high for companies, which are trying to make long-term plans when conditions seem to change by the day. Such uncertainty sent the US stock market last week to chaotic and historic swings, as investors struggled to catch up with Trump’s moves on tariffs, which could ultimately lead to a recession if not reduced.

China’s commerce ministry nevertheless welcomed the change in a Sunday statement as a small step even as it called for the US to completely cancel the rest of its tariffs. China’s leader Xi Jinping on Monday said no one wins in a trade war as he kicked off a diplomatic tour of Southeast Asia, hoping to present China as a force for stability in contrast with Trump’s frenetic moves on tariffs.

Elsewhere on Wall Street, Goldman Sachs rose 1.7% after reporting a stronger profit for the latest quarter than expected. It joined other big banks in doing so, such as JPMorgan Chase and Morgan Stanley.

Perhaps more encouragingly for Wall Street, the bond market was also showing some signs of increasing calm. Treasury yields eased following their sudden and scary rise last week, which seemed to rattle not only investors but also Trump.

Treasury yields usually drop when fear is high in the market because US government bonds have historically been seen as some of the world’s safest investments, if not the safest. But last week, yields rose sharply for Treasury bonds in an usual move. The value of the US dollar also fell against other currencies in another move suggesting investors may no longer see the United States as the best place to keep their cash during moments of stress.

Trump noted the moves in the bond market, which suggested investors “were getting a little queasy,” when he announced a 90-day pause on many of his tariffs last week.

That Trump acted only after the bond market made its scary move, but not after US stock market began trembling, “reveals this administration’s Achilles’ heel,” according to Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management.

The yield on the 10-year Treasury eased back to 4.41%. It had jumped to 4.48% on Friday from 4.01% the week before. It got an encouraging update in the morning on expectations for inflation among US consumers.

While US households raised their expectations for inflation in the year ahead, their expectations for inflation three and five years in the future were either unchanged or lower, according to a survey by the Federal Reserve Bank of New York.

That’s potentially good news for the Federal Reserve, which hates to see fast-rising expectations for longer-term inflation. Such expectations could kick off a feedback loop that drives behaviour among consumers that only worsens inflation.

The value of the US dollar, though, remained under pressure. It slipped against the euro and Japanese yen, while rising a bit against the Canadian dollar.

In China, stock indexes rose 2.4% in Hong Kong and 0.8% in Shanghai after the government reported that China’s exports surged 12.4% in March from a year earlier in a last-minute flurry of activity as companies rushed to beat increases in US tariffs imposed by Trump.

Meanwhile, the Trump administration’s tariff policies are a major shock to the US economy that could lead the Federal Reserve to cut interest rates to head off recession even if inflation remains high, or alternately leave little lasting imprint if they turn out to be a negotiating tool, Fed Governor Christopher Waller said on Monday.

Agencies