Trump Delays EU Tariffs... Major Indices Rebound [New York Stock Market Briefing]

Korea Economic Daily

Summary

President Trump announced a tariff delay on the EU, leading to a rise in major indices on the New York stock market.
The consumer confidence index exceeded expectations, stimulating investor sentiment.
The stock price rise of major tech companies was notable, with all 'Magnificent 7' companies seeing gains.

The New York stock market rose across the board on news that U.S. President Donald Trump has delayed the imposition of a '50% tariff' on the European Union (EU).

On the 27th (local time) at the New York Stock Exchange, the Dow Jones Industrial Average closed at 42,343.65, up 740.58 points (1.78%) from the previous trading day. The Standard & Poor's (S&P) 500 index rose 118.72 points (2.05%) to 5,921.54, and the tech-heavy Nasdaq Composite Index ended trading at 19,199.16, up 461.96 points (2.47%).

Previously, President Trump had stated on the 23rd that he could impose a 50% tariff on the EU starting from the 1st of next month due to a lack of progress in negotiations, but changed his stance two days later, saying, "We need time until July 9 to reach a good agreement."

Economic indicators also stimulated investor sentiment. The U.S. consumer confidence index for May, announced by the Conference Board, was 98.0 (based on 1985=100), a sharp rise of 12.3 points compared to April (85.7). It also significantly exceeded the expert forecast (86.0) compiled by Dow Jones.

The consumer confidence index indicates optimism about the future economy if it exceeds 100, and pessimism if it is below. It is interpreted that the tariff concerns, which had weighed on consumer economic sentiment since the U.S. and China agreed to a 90-day tariff war truce on the 12th, have greatly improved.

By stock, the 'Magnificent 7', referring to the major big tech companies, all saw their stock prices rise, highlighting the strength in tech stocks. Tesla surged 6.9% as CEO Elon Musk announced he would focus on company business instead of politics. Other major tech stocks such as Nvidia (3.21%), Apple (2.54%), Microsoft (2.34%), Amazon (2.50%), Alphabet (2.62%), and Meta (2.41%) also rose by 2-3%.

U.S. Treasury yields fell below the 5% mark again. According to the electronic trading platform Tradeweb, the 10-year U.S. Treasury yield was 4.45% at the close of the New York stock market, down 6 basis points (1bp=0.01% point) from the previous trading day on the 23rd. The 30-year U.S. Treasury yield also fell 8 basis points to 4.95% at the same time, dropping below the 5% mark.

Jongdong Noh, Hankyung.com Reporter dong2@hankyung.com