US equities surged on Monday as investor sentiment brightened on signs that President Donald Trump may be easing his stance on sweeping reciprocal tariffs. The Dow Jones Industrial Average jumped nearly 600 points, leading a broad rally across Wall Street, while tech giants and industrials gained on hopes that sector-specific levies will be delayed. Meanwhile, European markets closed slightly lower amid ongoing uncertainty, and Asia-Pacific equities were mixed ahead of Trump’s April 2 deadline. In fixed income, Treasury yields climbed as fears of an imminent trade war eased, while oil rose and gold retreated.

Key Takeaways:

  • Dow Jumps Nearly 600 Points as Tariff Concerns Ease: The Dow Jones Industrial Average surged 597.97 points, or 1.42%, to close at 42,583.32, marking one of its strongest sessions this month. Investors responded positively to signals that President Trump may scale back or delay key parts of his reciprocal tariff plan, easing fears of a full-blown trade war.
  • S&P 500 and Nasdaq Rally Led by Tech Rebound: The S&P 500 rose 1.76% to 5,767.57, while the Nasdaq Composite gained 2.27% to finish at 18,188.59. Tesla led the advance, jumping nearly 12% after nine consecutive weeks of losses. Meta Platforms and Nvidia each climbed more than 3%, lifting broader sentiment in the tech space.
  • Trump Suggests Narrower Tariffs, Boosting Market Confidence: Market optimism was reinforced after President Trump stated he may give “a lot of countries” breaks on upcoming reciprocal tariffs, and indicated that sector-specific levies on areas like autos and pharmaceuticals would not be part of the initial rollout on April 2. Analysts view the shift as reducing the risk of escalation into a full trade war.
  • European Markets End Lower Despite Resilient PMI Data: European stocks closed slightly lower after a choppy session, with the Stoxx 600 down 0.13%. Germany’s DAX fell 0.17% to 22,853, the FTSE 100 slipped 0.10% to 8,638.01, the FTSE MIB in Italy fell 0.2% and France’s CAC 40 declined 0.3% to 8,022. Eurozone manufacturing PMI rose to a two-year high of 48.7 in March, beating expectations, while France’s manufacturing PMI rose to 48.9. However, the UK’s manufacturing PMI fell sharply to 44.6, marking the steepest contraction in 18 months.
  • Asia-Pacific Markets Mixed Ahead of Tariff Deadline: Japan’s Nikkei 225 declined 0.18% to 37,608.49, while South Korea’s Kospi dropped 0.42% to 2,632.07. In contrast, Hong Kong’s Hang Seng Index rose 0.91% to 23,905.56 and China’s CSI 300 gained 0.51% to 3,934.85 after Premier Li Qiang called for greater market openness. Singapore’s inflation slowed to 0.9% year-on-year in February, marking the lowest rate in four years.
  • US Treasury Yields Rise as Trade Risks Recede and PMI Surprises: Yields moved higher on signs that a broad trade war may be avoided. The benchmark 10-year Treasury yield rose to 4.317%, while the 2-year yield climbed to 4.007%. The March S&P Global PMI reading came in at 54.3, well above February’s 51 and exceeding the 51.5 consensus estimate, signalling accelerating US economic activity.
  • Oil Prices Climb After Trump Targets Venezuelan Exports: Oil prices rose 1% as President Trump announced a 25% tariff on countries buying oil and gas from Venezuela. Brent crude settled at $73 per barrel (rose 84 cents or 1.2%), and West Texas Intermediate ended at $69.11 (up 83 cents or 1.2%). Gains were capped by the US decision to give Chevron until May 27 to wind down operations in Venezuela and expectations that OPEC+ will have a planned output hike.

FX Today:

  • Euro Softens as Rally Stalls Near Key Resistance: EUR/USD declined 0.12% to close at 1.0798, extending its pullback from the recent March high just below 1.0950. The pair had rebounded strongly earlier in the month, reclaiming all major moving averages and briefly breaking above long-term resistance. However, the latest rejection near 1.0900 suggests lingering caution as investors assess the durability of the eurozone’s economic recovery. With price still above the 200-day SMA at 1.0728, the bullish outlook remains cautiously intact. A close below 1.0725 would raise risks of a deeper retracement, while renewed strength above 1.0880 would put the 1.1000 level back in focus.
  • Sterling Hovers Below 1.3000 as Bullish Momentum Pauses: GBP/USD registered a modest gain of 0.04% to finish the day at 1.2919, holding just below the psychologically important 1.3000 mark. The pair has been consolidating near this level after staging a significant recovery from February’s lows near 1.2100. Technical support remains firm, with the 50-day, 100-day, and 200-day moving averages all trending higher and reinforcing the bullish structure. While short-term momentum has cooled, the upward trajectory remains intact as long as the pair holds above the 1.2800 region. A breakout above 1.3000 would likely target the September highs around 1.3150.
  • Dollar Gains Sharply Against Yen as Risk Appetite Improves: The Japanese yen weakened notably on Monday as investor demand shifted toward risk assets, pushing USD/JPY higher by 0.89% to settle at 150.62. The move reflects growing optimism around trade policy moderation from the Trump administration and a rebound in US economic activity, evidenced by a stronger-than-expected PMI reading of 54.3. The pair has now advanced nearly 400 pips since early March, when it bottomed near 146.50. Momentum remains bullish, but with major moving averages converging in the 151.50 to 153.00 region, traders will be closely watching for signs of either a breakout or short-term exhaustion.
  • Canadian Dollar Holds Steady Despite Modest Greenback Pullback: USD/CAD eased 0.19% to close at 1.4322, staying within its multi-week consolidation zone that has capped both upside and downside moves since January. The pair reached a high of 1.4349 during the session before encountering selling pressure. Price action continues to respect support near the 100-day moving average at 1.4243, while the 50-day average has flattened around current levels. Despite recent weakness, the broader uptrend that began last autumn remains in place, with the 200-day SMA rising steadily. A sustained move above 1.4370 could open the door for a retest of the February highs near 1.4450.
  • Australian Dollar Supported by Trade Optimism and China Rebound: The Aussie edged higher on Monday, with AUD/USD rising 0.20% to close at 0.6281. The currency found support at the 50-day moving average and was helped by upbeat signals from China, where officials emphasised the importance of open markets amid growing global tensions. Domestically, steady inflation data added to the backdrop of stability. Despite the gain, the pair remains locked in a range between the 50-day and 100-day SMAs, with overhead resistance near 0.6340 continuing to cap rallies. 

Market Movers:

  • Tesla Rebounds After Prolonged Decline: Tesla shares surged 11.9%, snapping a nine-week losing streak — the longest in its history. The rebound was supported by broad tech strength and optimism that tariffs may be less disruptive to global auto supply chains. 
  • Visa Advances as Altman’s Crypto Venture Explores Stablecoin Deal: Visa gained 2.5% after reports emerged that Sam Altman’s World Network is in discussions with the payments giant to collaborate on a stablecoin wallet. The move reflects growing convergence between traditional finance and digital assets. Investors welcomed the potential for Visa to lead in blockchain-based payment innovation.
  • ViaSat Soars on Deutsche Bank Rating Boost: Shares of ViaSat climbed 14.4% after Deutsche Bank upgraded the satellite firm to “buy” from “hold.” Analysts highlighted the company’s competitive position in global broadband and potential to unlock shareholder value. 
  • 23andMe Crashes Over 59% After Bankruptcy Filing: Genetic testing firm 23andMe collapsed 59.1% after filing for Chapter 11 bankruptcy protection in federal court. The company also announced the resignation of CEO and co-founder Anne Wojcicki. 
  • AZEK Surges on Acquisition by James Hardie: Shares of AZEK rallied 17.3% after James Hardie Industries agreed to acquire the company in a cash-and-stock deal valued at approximately $9 billion. 
  • FedEx Pops on Jefferies Upgrade and Cost Outlook: FedEx gained more than 5% after Jefferies upgraded the shipping company to “buy” from “hold.” Analysts noted that the market is underestimating an ongoing cost transformation effort that could boost margins. 
  • Generac Rises on Reinstated Buy Rating at BofA: Shares of Generac advanced over 4% after Bank of America reinstated coverage with a “buy” rating. The bank cited favourable long-term trends, including rising demand for backup power due to natural disasters and aging demographics. 

Markets kicked off the week with a strong rebound as investors responded positively to signs that President Trump may take a more measured approach to reciprocal tariffs. The rally was led by a sharp surge in tech stocks and a notable recovery in Tesla, helping lift all three major US indices. While European equities ended slightly lower, better-than-expected manufacturing PMI data in the eurozone helped cushion losses. Treasury yields climbed as trade war fears eased and US PMI data pointed to continued expansion. Currency markets reflected renewed dollar strength, particularly against the yen, while oil prices rose on Venezuela-related tariff headlines. With key economic releases still ahead this week — including US home sales, jobless claims, and the Fed’s preferred inflation gauge — markets will be watching closely for further confirmation of economic resilience amid shifting trade dynamics.