Wall Street finished higher Tuesday as growing optimism around a potential trade agreement reignited risk appetite late in the session. The Dow surged over 300 points after US Commerce Secretary said a deal was effectively completed, pending approval from a foreign government. That headline helped the S&P 500 notch its sixth straight gain, while the Nasdaq also pushed higher. Earlier in the day, markets were mostly flat amid cautious sentiment tied to tariffs and a heavy earnings calendar. With major tech giants set to report this week, investors are navigating a landscape shaped by both geopolitical developments and corporate results.

Key Takeaways:

  • Dow Surges on Trade Optimism: The Dow Jones Industrial Average jumped 300.03 points, or 0.75%, to close at 40,527.62. The index logged its sixth straight day of gains, its longest winning streak since July, as investors responded positively to the prospect of reduced tariff tensions.
  • S&P 500 Extends Win Streak to Six: The S&P 500 rose 0.58% to end at 5,560.83, continuing a streak of daily gains not seen since November. While the benchmark index drifted earlier in the session, sentiment improved following comments that a trade agreement was close.
  • Nasdaq Tracks Higher with Broader Market: The Nasdaq Composite advanced 0.55% to 17,461.32, lifted by improving outlooks for trade and anticipation around upcoming Big Tech earnings. Although pressure from tariff-related uncertainty lingers, buyers stepped in late-day following positive trade remarks.
  • Europe Gains as Earnings Roll In, Spain Growth Slows: European equities closed broadly higher as investors assessed earnings and macro updates. Germany’s DAX climbed 0.7% to its highest since early April, marking a sixth straight advance. Italy’s FTSE MIB gained 1.09%, while the UK’s FTSE 100 rose 0.55%. The pan-European Stoxx 600 index added 0.4%, led by utilities and healthcare. France’s CAC 40 slipped 0.2% despite resilient earnings, while Volvo Cars plunged 10% after pulling guidance due to profit weakness. In macro data, Spain’s Q1 GDP rose 0.6%, slightly below last quarter’s pace and under expectations, but it remained well ahead of the euro area average.
  • Asia Closes Mixed as Tariff Tensions Ease Slightly: Asia-Pacific markets posted mixed performances as traders responded to signals that the US might ease the impact of auto tariffs. Australia’s ASX 200 rose 0.92%, and South Korea’s Kospi gained 0.65%, with the Kosdaq up 0.98%. China’s CSI 300 dipped 0.17%, while Hong Kong’s Hang Seng Index finished flat despite a surge in March trade activity. India’s Sensex and Nifty saw muted moves in choppy trading. Japanese markets were closed for a holiday. Attention remained fixed on regional trade negotiations and corporate earnings across the continent.
  • Oil Slides Over 2% on Demand Fears And OPEC+ Outlook: Brent crude dropped 2.44% to $64.25 per barrel, and WTI fell 2.63% to $60.42, as traders reacted to renewed concerns that US tariffs would weaken global demand. Expectations that OPEC+ may increase output in June further pressured sentiment. Analysts have reduced demand forecasts amid trade war escalation, and BP shares sank 3.6% after missing profit estimates. Market participants are also bracing for results from Exxon and Chevron later this week.
  • Treasury Yields Decline Ahead of Economic Releases: The 10-year Treasury yield fell over 4 basis points to 4.17%, while the 2-year yield dipped to 3.658%. Bond markets gained amid risk-off positioning ahead of GDP, PCE inflation, and jobs data due later this week. Declining consumer sentiment and softening labour indicators reinforced safe-haven flows into Treasurys.
  • US Confidence and Labour Market Data Signal Weakening Outlook: Consumer confidence dropped sharply in April, with the Conference Board’s index falling to 86.0 — the lowest since May 2020. The Expectations Index plunged to 54.4, historically a warning sign for recession risk. Meanwhile, job openings slid to 7.2 million in March, the weakest reading since September. Although quit rates rose and layoffs declined, the overall picture suggests a cooling labour market under pressure from ongoing tariff uncertainty.

FX Today:

  • EUR/USD Pulls Back After Strong April Rally: EUR/USD closed at 1.1379, down 0.33% as the pair consolidated recent gains. Despite the mild decline, the technical structure remains bullish, with price holding above the 50-day (1.0926), 100-day (1.0659), and 200-day (1.0773) simple moving averages. The uptrend that started in early April appears intact, supported by rising moving averages and solid demand above 1.1300. Resistance near 1.1450 has capped further upside for now, but momentum may resume if buyers reclaim the zone. A break above 1.1450 could trigger a run toward 1.1600, while a dip below 1.1300 might shift attention to 1.1100.
  • GBP/USD Slips Below 1.3450 Resistance: GBP/USD fell 0.31% to settle at 1.3400 after failing to clear resistance near the 1.3450 level. The pair remains in a well-supported uptrend, with price positioned above its 50-day (1.2966), 100-day (1.2718), and 200-day (1.2843) SMAs. The pullback appears to be a short-term pause rather than a reversal, as technical indicators continue to point higher. Key support lies at 1.3300, followed by stronger footing near 1.3100. A decisive break above 1.3450 would open the door for a move toward 1.3500 and beyond.
  • USD/JPY Remains Capped Below Key Averages: USD/JPY closed at 142.29, inching up 0.23% but still firmly below major moving averages. The pair is stuck in a broader downtrend, with price beneath the 50-day (147.19), 100-day (151.16), and 200-day (149.95) SMAs, all of which continue to slope lower. Recent rebounds have lacked follow-through, and downside risks remain unless the pair can reclaim the 145.00 level. Support is holding around 140.50–141.00, but a break below this zone could accelerate losses toward 138.00. Until key resistance levels are cleared, rallies are likely to be sold into.
  • AUD/USD Rejected at Long-Term Resistance: AUD/USD dropped 0.75% to 0.6381 after failing to hold above its 200-day SMA at 0.6464. The pair had previously rebounded sharply from April lows, crossing above the 50-day (0.6300) and 100-day (0.6282) SMAs. However, it now faces a key test at long-term resistance, with two consecutive rejections suggesting a near-term ceiling. Support lies at 0.6300, with stronger demand likely around 0.6200. If price can reclaim the 0.6460–0.6480 range, upside targets would shift to 0.6600 and 0.6750. For now, AUD/USD remains in consolidation mode, paused beneath a critical technical barrier.
  • Gold Retreats but Holds Bullish Structure: Gold closed Tuesday at $3,320.91, down 0.69% as the metal eased from recent highs amid profit-taking. Despite the pullback, gold’s long-term trend remains bullish with price trading well above the 50-day ($3,067.44), 100-day ($2,894.97), and 200-day ($2,738.93) SMAs. The current consolidation phase is typical after sharp gains and may offer a platform for further upside. Initial support lies at $3,250, followed by $3,200. On the upside, resistance is building around $3,400, and a breakout could retest the $3,500 level with potential to reach $3,600 if momentum returns.

Market Movers:

  • Honeywell Jumps on Strong Earnings Beat: Shares rallied 5.4% after the industrial giant reported first-quarter earnings of $2.51 per share, topping estimates of $2.21. Revenue also beat expectations at $9.82 billion versus $9.59 billion forecast.
  • Hims & Hers Soars as Wegovy Partnership Announced: The telehealth stock surged 23% after Novo Nordisk revealed it would make its weight-loss drug Wegovy available through Hims’ platform, along with Ro and LifeMD. 
  • Leggett & Platt Rockets on Tariff Tailwinds: Shares soared 31.6% after the company reiterated full-year guidance and said it expects a net benefit from tariffs. Executives also noted potential challenges ahead, citing risks to consumer confidence and inflationary pressure.
  • Spotify Drops After Earnings Miss: The stock fell 3.5% after reporting Q1 operating income of €509 million, short of the €519.9 million analysts had expected. Revenue matched estimates at €4.2 billion, and monthly active users came in at 678 million, in line with guidance.
  • Regeneron Sinks on Weak Outlook and Miss: Shares slid 6.9% after the biotech firm missed earnings expectations and cut its full-year gross margin forecast. Adjusted earnings were $8.22 per share on $3.03 billion in revenue, below consensus estimates of $8.62 and $3.25 billion, respectively.
  • Deutsche Bank Climbs on Profit and Revenue Growth: The German lender gained 4% after posting a 39% increase in Q1 profit and a 10% rise in investment banking revenue. The strong performance helped offset concerns about the broader European banking sector.
  • Pfizer Gains as Cost Cuts Offset Revenue Dip: Shares climbed 3.2% after the drugmaker topped profit estimates and expanded its cost-cutting initiatives. Despite declining Covid vaccine sales, Pfizer maintained its 2025 guidance while acknowledging tariff uncertainties.
  • NXP Semiconductors Declines on CEO Transition: Shares fell 6.9% despite topping earnings and revenue estimates, as the company announced a leadership change. Rafael Sotomayor will succeed Kurt Sievers as CEO, raising uncertainty about the firm’s strategic direction.

Markets ended on a strong note Tuesday, lifted by optimism over a potential trade breakthrough and a wave of solid corporate earnings. While gains were broad-based, investor sentiment remains tethered to developments on the tariff front, especially as Big Tech earnings approach. Softer economic data — including weaker consumer confidence and job openings — added to the case for caution, keeping focus on upcoming reports for GDP, PCE inflation, and labour market trends. As headline risk persists and macro crosscurrents intensify, traders will be watching closely to see whether momentum can carry through the rest of the week.