U.S. stock index futures surged on Tuesday following President Donald Trump's retreat from his warning of significant tariffs on the EU, with tensions between the United States and the European bloc easing as traders returned from the Memorial Day holiday. On Sunday, Trump retracted his warning about imposing 50 per cent tariffs on EU imports next month, reinstating a July 9 deadline to facilitate negotiations between Washington and the 27-member bloc for reaching an agreement. On Friday, he stated that he was proposing a 50 per cent tariff starting June 1, voicing his dissatisfaction with the slow progress of trade talks with the EU. "Nonetheless, we're still uncertain if negotiations will yield results, even though the EU favours an agreement over increased tensions," Rabobank analysts stated in a report.
Asian and European markets showed a mixed performance following gains on Monday, while movements in U.S. assets were more significant as traders returned from the extended weekend. At 4:33 in the morning. ET, Dow E-minis gained 526 points, or 1.26 per cent, S&P 500 E-minis rose by 85.75 points, or 1.47 per cent, and Nasdaq 100 E-minis increased by 346.25 points, or 1.65 per cent. The majority of megacap and growth stocks surged in premarket trading. Apple increased by 1.9 per cent, Alphabet grew by 2.3 per cent, and Tesla advanced by 2.5 per cent. Trump Media & Technology Group rose by 10.3 per cent following a media article that indicated Trump's social media company intended to secure approximately $3 billion for investments in cryptocurrencies like bitcoin.
Nvidia, a key player in the semiconductor industry, began the week with a 2.8 per cent increase in its shares. The firm is scheduled to announce its quarterly earnings after the market closes on Wednesday. In economic updates, the consumer confidence report for May is set to be issued soon after markets open on Tuesday, and the minutes from the last U.S. Federal Reserve policy meeting are expected to come out on Wednesday. Several Fed officials are anticipated to deliver public statements throughout the week. On Tuesday, Minneapolis Fed President Neel Kashkari urged that interest rates should remain unchanged until it is clear how increased tariffs affect inflation. Data on Personal Consumption Expenditures, the Federal Reserve's preferred measure of inflation, for May and a revised estimate of first-quarter GDP are also set for release later this week.
On Friday, Wall Street experienced significant weekly declines due to concerns over rising U.S. debt and Trump's recent changes in trade policy, leading to a widespread selloff. Moody's, the credit rating agency, downgraded the U.S. credit rating, and the House's approval of Trump's extensive tax bill, which is anticipated to significantly increase federal debt, heightened worries. The S&P 500 is nearly 6 per cent away from its all-time peak, having strongly recovered from April's lows due to alleviating trade worries and mild inflation figures fueling a risk-on rally. On the negative side, stocks of gold mining companies such as Newmont dropped approximately 2 per cent as gold prices decreased by over 1 per cent.
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