On Tuesday, May 28, U.S. stocks rose across the board, led by the technology sector. The Dow Jones Industrial Average increased by over 740 points and the Nasdaq closed up nearly 2.5%. Investor sentiment benefited from Trump's decision to delay imposing high tariffs on EU goods and strong consumer confidence data. The market is also focusing on earnings reports from major companies and the upcoming Federal Reserve inflation indicators.
The three major indexes fully rebounded:
- Dow Jones Industrial Average rose 740.58 points, or 1.78%, to close at 42,343.65 points;
- Nasdaq Index rose 461.96 points, or 2.47%, to 19,199.16 points;
- S&P 500 Index rose 118.72 points, or 2.05%, to 5,921.54 points.
As Monday was a holiday for Memorial Day, the U.S. stock market was closed for a day. This surge reversed last week’s broad pullback. Previously, the three major indexes had fallen more than 2% last week due to Trump's threat to impose high tariffs on the EU and Apple.
Trump's Tariff Delay Boosts Market
Market sentiment improved significantly, partly due to the Trump administration's decision to extend the start date for imposing a 50% tariff on the EU from June 1 to July 9. Trump posted on Truth Social that the EU had requested to accelerate trade talks, expressing optimism about the negotiations. He also criticized the EU for its previous "deliberate delay."
Kevin Hassett, Director of the White House National Economic Council, revealed that several trade agreements might be reached this week, including negotiations with India.
Corporate Earnings and Strong Tech Stocks Attract Attention
Investors are closely watching corporate earnings this week, especially those of AI leader Nvidia, which will announce its earnings on Wednesday. The market expects its first-quarter revenue to surge by 65.9%. Additionally, companies like Okta, Macy's, and Costco are also set to release their latest financial reports.
Currently, more than 95% of S&P 500 index companies have reported their earnings, with nearly 78% exceeding expectations, reinforcing market confidence in corporate profitability.
Strong Consumer Confidence Boosts Economic Outlook
Data released on Tuesday showed that the U.S. consumer confidence index for May jumped to 98.0, much higher than the previous value of 85.7 and the median market expectation of 87.1. The current condition index rose to 135.9, and the expectations index increased to 72.8. The median inflation expectation fell from 5.9% to 5.3%. This shows that despite facing trade uncertainties, U.S. consumers continue to demonstrate resilience.
Federal Reserve Officials Signal Caution
Several Federal Reserve officials expressed concern over inflation risks brought by tariffs. Neel Kashkari, President of the Minneapolis Federal Reserve, stated at an event hosted by the Bank of Japan that with inflation continuously exceeding the 2% target for four years, the Federal Reserve should keep interest rates unchanged until the impact of tariffs becomes clearer.
Thomas Barkin, President of the Richmond Federal Reserve, pointed out that companies face policy uncertainty, and hiring and investment have been restrained. He emphasized that while consumer spending remains stable, confidence has significantly declined, which could affect the economic trajectory in the coming months.
