Stocks closed higher Monday as technology shares rebounded following President Trump’s decision to temporarily exempt smartphones, semiconductors, and other key electronics from newly proposed tariffs. All three major indexes reversed early losses in a volatile session, with investors cautiously welcoming what some viewed as a partial retreat from more extreme trade measures. The move helped ease market anxiety after a bruising few weeks driven by tariff fears and uncertainty over global supply chains. Still, officials stressed the exemptions may be temporary, keeping markets on edge. A sharp decline in Treasury yields and a steep drop in the VIX added to the supportive backdrop.

Key Takeaways:

  • Dow Rebounds Over 300 Points: The Dow Jones Industrial Average gained 312.08 points, or 0.78%, to close at 40,524.79 after a volatile session marked by uncertainty around trade policy. Investors welcomed the White House’s move to temporarily exempt smartphones, computers, and semiconductors from new reciprocal tariffs. The Dow remains down around 4% since early April when the tariffs were first unveiled.
  • S&P 500 Climbs as Tariff Uncertainty Eases: The S&P 500 rose 0.79% to finish at 5,405.97, recovering from early-session losses to post a second straight daily gain. Still, the broader index remains nearly 5% below its April peak.
  • Nasdaq Advances as Chip Stocks Lead Recovery: The Nasdaq Composite gained 0.64% to end at 16,831.48, led by strength in semiconductors and PC hardware. Monday’s rally helped the index recover part of its recent pullback, but the Nasdaq is still off roughly 4.4% since April 2. 
  • European Markets Rally Sharply on US Tariff Pause: The pan-European Stoxx 600 surged 2.7% as investor sentiment improved following the tariff exemption announcement from Washington. The FTSE 100 climbed 2.14% to 8,134.34, while the CAC 40 rose 2.45%, the DAX advanced 2.85%, and the FTSE MIB led the region with a 2.88% jump. Novo Nordisk shares rose 3.7% after Pfizer abandoned a competing drug trial, while LVMH slipped after reporting weaker-than-expected Q1 revenue. Some retailers warned of low-cost Chinese goods being redirected to Europe, which could pressure margins and quality standards. 
  • Asia Surges as Trade Risks Ease and Talks Loom: Asian equity markets rallied after the US tariff pause on key consumer electronics spurred hopes of de-escalation. Hong Kong’s Hang Seng Index jumped 2.4%, with tech-heavy stocks lifting the Hang Seng Tech Index by 2.34%. Japan’s Nikkei 225 rose 1.18%, South Korea’s Kospi gained 0.95%, and Australia’s ASX 200 added 1.34%. Mainland China’s CSI 300 advanced 0.23%, while Indonesia’s Jakarta Composite rallied 1.99% to its highest close since March. Indian markets were closed for a public holiday.
  • Oil Holds Steady as OPEC Cuts Demand Forecast: US crude rose 14 cents to settle at $61.63 per barrel, while Brent added 22 cents to finish at $64.98. OPEC revised its global oil demand forecast downward by 150,000 barrels per day due to the potential economic drag from US tariffs. Crude prices have already fallen over 13%–14% since April 2, when the tariff announcement first shocked markets. 
  • Treasury Yields Decline on Waning Tariff Fears: Bond yields fell as the market reacted to signs of temporary tariff relief. The 10-year Treasury dropped 11 basis points to 4.382%, while the 2-year yield fell to 3.849%. The drop followed one of the sharpest two-day surges in yields last week, driven by policy uncertainty and volatility. 

FX Today:

  • EUR/USD Consolidates Below Multi-Month Resistance: EUR/USD closed Monday at 1.1321, up 0.34% on the day after testing an intraday high of 1.1359. The pair has now gained nearly 700 pips since its March low, with price reaching its highest levels since June 2023. The EUR/USD remains comfortably above all major SMAs, with the 50-day rising steeply at 1.0713. The bullish crossover of the 50- and 100-day SMAs earlier this month further supports the prevailing trend. However, momentum may be overstretched in the short term, and traders are watching for a possible pause or pullback. Immediate support is seen at 1.1200, followed by the former breakout area near 1.1100. A sustained move above 1.1400 could trigger an extension toward the 1.1500 level. 
  • GBP/USD Breaks Out to New 2025 Highs: GBP/USD surged 0.95% to close at 1.3198, marking a fresh high for the year and continuing its powerful rally that began in early February. The pair convincingly cleared former resistance near 1.3100. Monday’s breakout was supported by strong technicals, as price remains well above the 50-day, 100-day, and 200-day SMAs, all of which have begun sloping higher. The 200-day SMA around 1.2820 has now flipped to key support, reinforcing the uptrend. Immediate resistance lies between 1.3250 and 1.3300, with a break above that zone opening the door to retest mid-2023 highs near 1.3400. Short-term overbought conditions may trigger minor retracements, but as long as price holds above 1.3100, bulls remain in control. 
  • USD/JPY Extends Slide to Eight-Month Lows: USD/JPY dropped 0.28% on Monday to close at 143.04, its lowest finish since August 2024. The pair fell as low as 142.23 intraday, continuing its sharp decline from the March high near 152.50. Price has now broken decisively below all major SMAs, with the 50-day at 149.42 and the 200-day at 150.86, both sloping downward. Technical structure is defined by lower highs and lower lows, with resistance now firm at 145.00 and 147.00. Support lies at 141.50, followed by the psychologically important 140.00 level. The rapid pace of the decline has some traders eyeing the risk of a short-term bounce, but momentum remains heavily tilted to the downside. Unless USD/JPY reclaims 146.00 and stabilises, bearish pressure is expected to persist.
  • AUD/USD Continues Hot Streak, Nears Breakout Threshold: AUD/USD rallied 1.16% to settle at 0.6436, notching its sixth consecutive daily gain and extending its recovery from April lows near 0.5913. The pair is now challenging the 0.6450–0.6480 resistance zone, where the 200-day SMA currently resides. Monday’s candle closed near the session high, reflecting strong buying momentum and healthy demand. Price is also trading above the 50-day and 100-day SMAs for the first time since January, indicating a potential full trend reversal in the making. A confirmed close above the 200-day SMA at 0.6482 would validate the breakout and shift sentiment decisively bullish. Resistance beyond that lies near 0.6550 and 0.6600, while immediate support is seen at 0.6350. The broader structure has transitioned to higher highs and higher lows, and as long as AUD/USD holds above 0.6220, the bulls are in firm control. 
  • Gold Retreats from Highs as Momentum Stalls: Gold settled at $3,212 on Monday, down 0.74% on the day after briefly hitting an intraday high of $3,245. The metal showed signs of fatigue after a strong rally earlier this month, with Monday’s session forming a bearish rejection candle. Price closed closer to the low of the day at $3,193, suggesting near-term caution is warranted. Despite the pullback, gold remains firmly in an uptrend, with the 50-day SMA at $2,977 and the 200-day at $2,692, both steadily rising. The key resistance zone remains between $3,245 and $3,250, which the metal has now failed to breach decisively. Immediate support sits near $3,175, followed by $3,080 and the rising 50-day average. A confirmed breakout above the recent high would signal continuation, but failure to hold $3,175 could prompt a deeper correction toward structural support.

Market Movers:

  • Chipmakers Rally on Electronics Tariff Exemptions: Western Digital (WDC) surged more than 4%, while Seagate Technology (STX) climbed over 3% after President Trump temporarily paused reciprocal tariffs on consumer electronics. Micron Technology (MU) and Texas Instruments (TXN) rose more than 2%, and shares of AMD, ARM, ON Semiconductor (ON), NXP Semiconductors (NXPI), and GlobalFoundries (GFS) all closed more than 1% higher.
  • Consumer Tech Stocks Jump as Tariff Pressure Eases: Dell Technologies (DELL) advanced more than 3%, while Best Buy (BBY) and HP Inc. (HPQ) gained over 2% each after the White House issued exemptions for consumer electronics, boosting investor sentiment across the hardware and retail tech space.
  • Auto Sector Surges on Talk of Temporary Tariff Relief: Stellantis (STLA) soared over 6%, leading the automotive sector higher after President Trump floated possible exemptions for imported vehicles and parts. Aptiv (APTV) rose more than 5%, while General Motors (GM) and Ford Motor (F) both gained over 4%. 
  • Palantir Pops on NATO AI Contract Win: Palantir Technologies (PLTR) jumped more than 4% after the company announced NATO had acquired one of its AI-powered military systems. The deal reinforced Palantir’s growing role in government and defence contracts, adding to investor confidence.
  • Chinese Exporter PDD Rallies on Trade Reprieve: PDD Holdings (PDD) climbed over 4% to lead gainers in the Nasdaq 100 after Trump’s pause on tariffs covering most consumer electronics. The move is expected to benefit major Chinese online retailers and exporters reliant on access to the US market.

Markets closed higher Monday as investors cautiously welcomed a temporary pause in US tech tariffs, sparking a relief rally in semiconductors, electronics, and global equities. While the tone shifted toward optimism, officials’ warnings that exemptions may be short-lived kept uncertainty in play. Lower Treasury yields and a sharp drop in volatility helped boost sentiment across asset classes. However, with key indexes still down sharply since early April, traders remain wary of potential reversals. Focus now turns to upcoming US trade negotiations with Asian partners, which could set the next direction for equities, commodities, and currencies. Investors will also be watching corporate earnings and macro data releases for confirmation that the worst of the tariff-driven volatility may be behind them.