A rally in US stocks Monday morning amid reports that President Donald Trump’s tariffs will be less widespread than feared underscored how more clarity on the administrations new policies remains the key to a market bounceback.
S&P 500 futures (ES=F) rose more than 1% while Dow Jones Industrial Average futures (YM=F) advanced 0.9%. Contracts on the tech-heavy Nasdaq 100 (NQ=F) led the gains, up more than 1.4%. The rally came after both Bloomberg and the Wall Street Journal reported Trump’s “Liberation Day” reciprocal tariffs will be more measured than initially thought.
Tariff uncertainty was a key catalyst for the stock market sell-off over the past month. Piper Sandler chief investment strategist Michael Kantrowitz told Yahoo Finance that he’d be watching for any clarity on those policies as the key turning point for the stock market’s drawdown to potentially bottom.
“Usually, [when] the primary catalyst that stops becoming a problem, essentially, that allows the market to find its footing,” Kantrowitz said.
Initially, investors had been waiting for April 2nd, the day Trump dubbed “Liberation Day,” for more information on tariffs. But weekend reports indicated that the Trump administration has narrowed its focus on the tit-for-tat duties to what it has called the “dirty 15” countries — which have an unfavorable trade balance with the US.
Treasury Secretary Scott Bessent told Fox Business last week, “it’s 15% of the countries, but it’s a huge amount of our trading volume.”
He added, “and they have substantial tariffs, and as important as the tariff or some of these non-tariff barriers, where they have domestic content production, where they do testing on our — whether it’s our food, our products, that bear no resemblance to safety or anything that we do to their products.”
Fundstrat head of research Tom Lee wrote in a note to clients on Sunday night that markets appeared to be “setting up for a potential face-ripper rally this week as recent developments have eased several of the major fears that have weighed on equities since December.”
“Trade war concerns are easing, brightening market sentiment,” Lee wrote.
Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
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