Global stock markets surged on Monday, led by strong gains in U.S. equities, as reports indicated that President Donald Trump’s administration might adopt a more selective approach to tariffs. Meanwhile, U.S. Treasury yields climbed in response to the news, reflecting improved investor sentiment.
According to reports from the Wall Street Journal and Bloomberg, the administration is expected to avoid broad sector-specific tariffs and instead implement reciprocal levies beginning April 2. This development eased some concerns about the potential economic impact of sweeping trade restrictions.
“Investors are feeling a slight sense of relief, but skepticism remains about how long this optimism will last,” said Sam Stovall, chief investment strategist at CFRA Research. “The key concerns—tariffs and their potential consequences for economic growth, inflation, and corporate profits—have not disappeared.”
Market Performance and Economic Data
Following weeks of uncertainty, U.S. stocks posted significant gains. The Dow Jones Industrial Average climbed 597.97 points, or 1.42%, closing at 42,583.32. The S&P 500 rose 100.01 points, or 1.76%, to 5,767.57, while the Nasdaq Composite gained 404.54 points, or 2.27%, reaching 18,188.59—its highest level since March 7.
On the global stage, MSCI’s index of world stocks advanced by 1.17% to 851.83, hitting a two-week high. Despite this rebound, tariff uncertainty weighed on European markets, with the pan-European STOXX 600 slipping 0.13%. Earlier gains had been driven by data showing a slight improvement in eurozone business activity.
In the U.S., fresh economic data offered mixed signals. The S&P Global U.S. Composite PMI Output Index, which tracks both manufacturing and services, rose to 53.5 in March from 51.6 in February, signaling continued expansion. However, business confidence remained fragile, with sentiment falling to its second-lowest level since 2022 due to concerns over trade policies and government spending cuts.
Bond Yields and Currency Movements
The prospect of a more targeted tariff approach drove U.S. Treasury yields higher. The benchmark 10-year yield rose 8.7 basis points to 4.339%, marking its sharpest increase since mid-February.
Meanwhile, Atlanta Federal Reserve President Raphael Bostic signaled a slower pace of inflation reduction and suggested the Fed may cut its benchmark interest rate by only 0.25 percentage points by year-end.
In currency markets, the U.S. dollar strengthened. The dollar index rose 0.26% to 104.30, while the euro slipped 0.12% to $1.0801. The greenback also climbed 1.54% against the Turkish lira, following the arrest of Istanbul Mayor Ekrem Imamoglu, a key political opponent of President Tayyip Erdogan, which sparked Turkey’s largest protests in over a decade.
Against the Japanese yen, the dollar advanced 0.9% to 150.65, while the British pound edged slightly higher to $1.2916.
Oil Prices and Tariff Concerns on Energy Imports
Oil prices rose after Trump announced a new 25% tariff on any country purchasing oil or gas from Venezuela. U.S. crude settled 1.22% higher at $69.11 per barrel, while Brent crude gained 1.16%, closing at $73 per barrel. As markets react to shifting trade policies, investors remain cautious about the potential economic impact of upcoming tariff decisions, with many watching for further clarity on their scope and implementation.
