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Major Indexes Rally After Holiday Weekend
U.S. stocks surged on Tuesday, May 27, 2025, as investors returned from the Memorial Day holiday to news that President Donald Trump has delayed implementing tariffs on European Union imports. The market’s positive reaction underscores the significant impact trade policy continues to have on investor sentiment.
The Dow Jones Industrial Average jumped 1% or more than 400 points, while the S&P 500 climbed 1.3% and the tech-heavy Nasdaq Composite soared 1.8% in early trading. Futures had indicated even stronger gains before the market opened, with Dow futures up 1.2% (over 500 points), S&P 500 futures up 1.3%, and Nasdaq 100 futures adding 1.4%.
This rally puts the S&P 500 close to positive territory for the year, after being down 1.3% coming into this week. Despite last week’s losses, major indexes are on track to post their first monthly gains since January, with the S&P 500 up 4.2% and the Dow up 2.3% for May prior to today’s trading.
Trade Tensions Ease as Trump Extends Deadline
The market’s upswing comes after President Trump announced on Sunday that he would delay the implementation of 50% tariffs on European Union imports from June 1 to July 9. This extension allows more time for negotiations between Washington and the 27-nation bloc.
“However, we’re still in the dark as to whether talks will lead anywhere, despite EU preference of a deal over escalation,” Rabobank analysts noted.
The delay represents another instance of Trump’s pattern of making trade threats before later backtracking, leaving markets in a state of uncertainty. This volatility has been a defining characteristic of market movements in recent months.
Tech Stocks Lead the Rally
Technology stocks were among the day’s biggest gainers. Tesla (TSLA) climbed 2.5% despite news that its European sales plunged 49% year-on-year in April, according to the European Automobile Manufacturers’ Association.
Nvidia (NVDA), which is scheduled to report earnings on Wednesday after market close, gained 2.8%. Investors will be closely watching the AI chipmaker’s quarterly revenue growth for assurance that AI spending by big tech customers remains robust. They’ll also be looking for updates about the company’s sales to China following tighter export controls imposed by the Trump administration.
Trump Media & Technology Group (DJT) advanced 10.3% after reports that Trump’s social media firm planned to raise about $3 billion to spend on cryptocurrencies such as bitcoin.
Key Economic Data and Upcoming Events
Investors are anticipating several important economic reports and corporate earnings announcements this week. The May consumer confidence report is due shortly after markets open today, while minutes from the Federal Reserve’s last policy meeting will be released on Wednesday.
Minneapolis Fed President Neel Kashkari on Tuesday called for holding interest rates steady until there is clarity on how higher tariffs impact inflation, signaling the central bank’s cautious approach to monetary policy amid trade uncertainties.
Later this week, Personal Consumption Expenditure (PCE) data—the Fed’s preferred inflation indicator—and a second estimate of first-quarter GDP are scheduled for release, providing further insight into the health of the U.S. economy.
Major Earnings Reports This Week
Several high-profile companies are set to report earnings this week, potentially moving markets further:
– Wednesday, May 28: Nvidia (NVDA), Salesforce (CRM), Abercrombie & Fitch (ANF), HP Inc. (HPQ), Macy’s (M), and C3.ai (AI)
– Thursday, May 29: Costco (COST), Marvell Technology (MRVL), Royal Bank of Canada (RY), Ulta Beauty (ULTA), Zscaler (ZS), and Dell Technologies (DELL)
– Friday, May 30: Canopy Growth (CGC)
Global Market Perspective
Asian markets were mixed on Tuesday, with Japan’s Nikkei 225 and South Korea’s Kospi both falling slightly by 0.15%. Hong Kong markets were poised to open flat.
In Europe, the Stoxx Europe 600 index erased Friday’s losses that were sparked by Trump’s initial tariff threat.
Oil prices remained steady as the market weighed the prospect of easing trade tensions ahead of an OPEC+ meeting that will make a decision on supply policy. Brent traded below $65 a barrel, while West Texas Intermediate was near $61.
Market Outlook
Despite today’s rally, concerns about mounting U.S. debt and potential trade disruptions continue to loom over markets. Credit rating agency Moody’s recently cut the U.S. credit rating, and Trump’s sweeping tax bill—expected to substantially expand federal debt—passed a House vote, adding to investor worries.
The S&P 500 remains about 6% from its record highs, though it has rebounded sharply from April lows as easing trade concerns and tame inflation data have spurred a risk-on rally.
As we move further into the week, market participants will be closely monitoring Fed officials’ public remarks, economic data releases, and high-profile earnings reports—particularly Nvidia’s results—for clues about the market’s direction in the coming months.