US stocks climb on hopes for less aggressive tariffs

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Tech stocks led a rebound on Wall Street on Monday amid rising optimism that Donald Trump’s impending tariffs will be less aggressive than feared.

The blue-chip S&P 500 rose 1.5 per cent by mid-morning trading in New York, with all 11 sectors in positive territory. The tech-heavy Nasdaq Composite jumped 2.1 per cent, with Tesla up 9.7 per cent. 

Monday’s gains come after the S&P last week snapped a four-week losing streak and are the latest sign that a heavy sell-off in US stocks this year may be easing. 

Analysts said sentiment had been boosted by reports over the weekend that the White House is considering watering down some of the tariffs expected to take effect on April 2, dubbed “Liberation Day” by Trump. The US president said on Friday that there would be “flexibility” in his plans to apply reciprocal tariffs to US trading partners.

Better than expected US manufacturing and services sector data, released on Monday morning, provided investors with further encouragement.

S&P Global’s flash US composite purchasing managers’ index rose to a three-month high of 53.5. Any reading above 50 suggests that most businesses are reporting growth in activity. Expansion in the US’s services sector accounted for the rise, with manufacturing activity contracting.

Hope that “regularisation and rationalisation of tariff policy is coming” was driving the gains, said Thierry Wizman, global foreign exchange and rates strategist at Macquarie.

US government bonds slipped on Monday as stocks climbed, with the 10-year Treasury yield, which moves inversely to prices, rising 0.07 percentage points to 4.32 per cent. The dollar rose 0.2 per cent against a basket of six other major currencies.

Stocks held their gains after Trump said the US would impose a 25 per cent tariff on all imports from any country that buys oil or gas from Venezuela.

European stocks were relatively subdued. The region-wide Stoxx Europe 600 was up less than 0.1 per cent and Germany’s Dax rose 0.1 per cent. London’s FTSE 100 was flat. 

Investors have rotated out of US equities this year after Trump outlined plans to radically reorientate trade policy and gave Elon Musk licence, as the head of the so-called Department of Government Efficiency, to find potential savings across the federal government.