[New York Stock Market Briefing] Strong gains in all 3 major indexes on expectations of reciprocal tariff deferral... S&P500 nearing record high

Treasury yields drop on rumors of early Fed Chair replacement

Dollar value at lowest in 3 years

Expectations that the Trump administration may extend the reciprocal tariff deferral period, set to expire on the 8th of next month (local time), led the three major New York stock indexes to close higher on the 26th.

On this day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average rose 404.41 points (0.94%) to close at 43,386.84. The S&P 500 Index was up 48.86 points (0.8%) at 6,141.02, and the tech-heavy NASDAQ Composite Index closed up 194.36 points (0.97%) at 20,167.91.

The S&P 500 Index rose as high as 6,146.52 during the session, nearing its February 29 record (6,147.43). The NASDAQ Composite Index also approached its intraday high set on December 16 last year (22,04.58).

As geopolitical tensions in the Middle East eased and the White House hinted at a tariff negotiation deadline extension, positive investor sentiment formed and stock prices gained momentum.

Karoline Leavitt, White House spokesperson, said at a briefing that the deferral deadline for reciprocal tariffs “will probably be extended” but added that “it is a decision for the President (Trump) to make.”

Steven Mnuchin, Chair of the Council of Economic Advisers, said in a media interview, “(Negotiations) are ongoing, and if there is genuine goodwill, we cannot sabotage it by unleashing tariff bombs,” adding, “In my view, for those countries negotiating in good faith and making progress, it is reasonable to defer the deadline.”

The Trump administration had applied differentiated reciprocal tariffs to 57 economic entities, including South Korea, since April 9 and decided to defer them for 90 days. With the deferral period expiring on the 8th of next month, the White House’s suggestion of a possible extension revived optimism that the Trump administration’s high tariffs were ultimately a bargaining chip.

Earlier, President Trump had said on the 11th that he was open to extending the negotiation deadline with global trading partners but that it might not be necessary.

By industry, all sectors except consumer staples and real estate saw gains. Communication services, consumer discretionary, energy, industrials, and materials all rose by more than 1%.

Among mega-cap tech firms with market caps over $1 trillion, all rose except Apple Inc. and Tesla, Inc. NVIDIA Corporation, which climbed 4.3% the previous day to reclaim the largest market cap, gained another 0.5% to hit a new record high in just one day.

Amazon.com, Inc., Meta Platforms, Inc., and Broadcom Inc. each jumped over 2%, while Alphabet Inc. and Microsoft Corporation recorded gains in the 1% range.

US memory chip giant Micron Technology, Inc. also released earnings guidance that beat expectations, which supported the market. However, Micron shares closed slightly lower.

Bank stocks, expected to benefit after the Federal Reserve passed a revised rule lowering the Supplementary Leverage Ratio (SLR) applied to big banks, strengthened. JPMorgan Chase & Co. rose 1.65% to surpass a $800 billion market cap, and Bank of America Corporation climbed 1.33%.

US Treasury yields declined on speculation that President Trump may name Jerome Powell’s successor as Fed Chair earlier than expected, boosting hopes for an early rate cut.

According to Tradeweb Markets Inc., the 10-year Treasury yield was 4.24% at the close of the New York market, down 0.05 percentage points from the previous session.

Rumors of an early replacement for Fed Chair Powell pushed the US dollar to its lowest level in over three years.

The dollar index, which measures the greenback against six major foreign currencies, stood at 97.3 at the New York close, down 0.4% from the previous session. This is the lowest since March 2022, a period of three years and three months.

Marc Chandler, chief market strategist at Bannockburn Global Forex, stated in a note to investors, “Attempts to influence the Fed directly are being received negatively by investors.”

According to FedWatch Tool by the Chicago Mercantile Exchange, the probability that the Fed will keep the benchmark rate unchanged in July has been raised to 79.3%.

The CBOE Volatility Index (VIX) slipped 0.17 points (1.01%) to 16.59.

Reporter Sam Koh, Hankyung.com jsk@hankyung.com