U.S. Stocks Rise as Trump Delays EU Tariffs

On the evening of May 27, Beijing time, U.S. stocks opened higher on Tuesday. U.S. President Trump announced on Sunday that he agreed to postpone the imposition of a 50% tariff on the European Union from June 1 to July 9. A White House official stated that several trade agreements could be reached this week.

Tuesday's market reversed the downward trend from the previous week. U.S. stocks were closed on Monday for Memorial Day.

Aaron Chwee, the head of wealth management at Overseas Chinese Banking Corporation, stated, "Although the delay in EU tariffs has boosted the market in the short term, investor concerns about trade relations and upcoming economic indicators remain."

Last week, the Dow Jones, S&P 500, and Nasdaq Composite Index all fell by more than 2%, as investors were concerned about Trump's threat to impose high tariffs on the EU and Apple Inc.

Adam Crisafulli, an analyst at Vital Knowledge, pointed out, "Given the market's blind optimism about the two major macro risks—tariffs and fiscal policy/treasury yields—and the high valuation of stocks, we remain cautious about chasing the S&P 500 index at current levels."

He added, "Trump's most aggressive tariff threats, including his statement on Friday morning, will not materialize. However, over the past four months, he has implemented substantial import taxes, and his government is likely to continue doing so."

Traders this week will focus on Okta's earnings report after the market closes on Tuesday, followed by reports from NVIDIA, Macy's, and Costco in the coming days.

White House National Economic Council Director Kevin Hassett stated on Tuesday, "We may even see several agreements this week." He mentioned that India is one of the countries close to reaching an agreement.

Earlier, on Sunday, Trump stated that at the request of European Commission President Ursula von der Leyen, he would postpone the imposition of a 50% tariff on the EU until July 9. Previously, Trump had proposed imposing a 50% import tax on the EU starting June 1.

Trump stated that von der Leyen and he had a phone conversation, hoping to postpone the imposition of a 50% tariff on the EU to "seriously advance" negotiations with the U.S. side.

Von der Leyen said earlier that day that she had a "good call" with Trump, but "to reach a good agreement, we need time until July 9." Von der Leyen stated that the EU is ready to "quickly and decisively" advance negotiations with the U.S.

Trump threatened on Friday, May 23, to impose a 50% tariff on imports from the EU starting June 1, much higher than the 20% "reciprocal tariffs" that the U.S. had previously announced to temporarily suspend on the EU, drawing strong dissatisfaction from the EU side and causing another round of market turmoil.

At present, there are significant differences between the U.S. and the EU in the trade sector. The EU is willing to make concessions in purchasing U.S. natural gas, weapons, and agricultural products but will not accept U.S. demands to abolish value-added tax, weaken digital regulation and taxation, and lower food standards.

Additionally, some analysts believe that the U.S. government is not satisfied with the current U.S.-EU relations. Clay Ramsey, a researcher at the International and Security Research Center of the University of Maryland, stated that the U.S. government currently holds the view that the EU benefits unilaterally in EU-U.S. relations.

In his criticism of the EU, Trump stated that the EU was established to "take advantage of the U.S. in trade," accusing the EU's trade policies of being unreasonable, resulting in a massive trade deficit for the U.S. with the EU each year, which is "completely unacceptable."