U.S. stock markets kicked off the week with strong gains as investors responded positively to media reports suggesting that President Donald Trump may scale back his planned reciprocal tariffs set to take effect on April 2. The White House has neither confirmed nor denied whether changes to the policy are under consideration.
The Dow Jones Industrial Average surged by 500 points, or 1.3%, while the Nasdaq Composite jumped more than 350 points (around 2%), and the S&P 500 climbed by nearly 100 points, posting a 1.6% gain.
In the bond market, U.S. Treasury yields rose across the board, with the 10-year yield breaking above 4.32%.
Optimism Builds as Tariff Adjustments Loom
“Stock index futures jumped sharply this morning, thanks to reports hinting at a possible delay or moderation in planned tariffs, which encouraged fresh buying,” said an analyst at OEXN. “This is the final full trading week of March, and with bulls still trailing by 4% to 6% across major indices, there’s pressure to close the month strong.”
Trump Considers Scaling Down Reciprocal Tariffs
Reports suggest that the Trump administration is weighing revisions to its upcoming reciprocal tariff strategy. Instead of targeting specific industries, the new approach may impose duties on around 15% of countries that maintain long-standing trade deficits with the United States.
Bloomberg also reported that the White House could exempt certain nations from the tariffs altogether.
Speaking from the Oval Office on March 21, Trump mentioned that there would be a level of “flexibility” in his tariff plan.
“A lot of countries are asking for exceptions,” he said. “But once you give one a pass, others will demand the same. I’m not changing my position — but flexibility is an important word.”
Earlier this month, Trump temporarily exempted U.S. automakers from certain tariffs, though he insisted that this did not signal a shift in his stance.
Additionally, he announced a new trade penalty: any country purchasing oil from Venezuela will face an extra 25% tariff on any further trade with the U.S., citing Venezuela's alleged smuggling of violent criminals into the country.
As a result, U.S. crude prices climbed over 1%, trading above $69 per barrel.
Tariff Uncertainty Fuels Market Volatility
Since returning to the White House following his 2024 election victory, Trump has revived aggressive trade measures, including a 25% tariff on all steel and aluminum, a 20% tariff on Chinese goods, and as of March 4, universal 25% tariffs on Canadian and Mexican imports—although he later paused levies on items compliant with the USMCA agreement.
On social media, Trump has dubbed April 2 as “Liberation Day,” marking the official start of his reciprocal trade measures.
These shifting trade dynamics have introduced fresh volatility to Wall Street, with investors fearing that tariffs could exacerbate inflation and hinder economic growth. Both the Nasdaq and S&P 500 recently entered correction territory amid these concerns.
“With April 2 approaching fast, markets could see renewed turbulence,” the OEXN analyst warned.
Inflation Outlook Improving, Growth Projections Revised Down
While the impact of tariffs is yet to be fully reflected in economic data, early indicators suggest inflation may be easing.
Later this week, the Federal Reserve’s preferred inflation gauge, the PCE Price Index, will be released. Forecasts expect the headline PCE to fall to 2.4%, with core PCE holding steady at 2.6%.
At its March 19 meeting, the Fed left interest rates unchanged for the second consecutive time. Chair Jerome Powell told reporters that the central bank is waiting for further progress on inflation and clearer insights into the net impact of the new administration’s fiscal, immigration, regulatory, and trade policies.
Powell described tariff-driven inflation as potentially “transitory”, suggesting it may not warrant immediate action.
“If inflation is expected to fade quickly on its own, it can be appropriate to look through it,” Powell said. “That may apply in the case of tariffs — depending on how rapidly the effects pass through and whether inflation expectations remain anchored.”
In its updated economic projections, the Fed lowered its 2025 GDP growth forecast from 2.1% to 1.7%, while raising its core PCE inflation estimate from 2.5% to 2.8%.
Waiting for ‘Liberation Day’ to Test Tariff Impact
With April 2 — "Liberation Day" — drawing near, markets and policymakers alike are bracing for the real impact of the tariffs to unfold. As Fed Chair Powell signaled a wait-and-see approach, he may now observe how deeply these trade measures shape the inflation and growth trajectory before committing to any further policy shifts.OEXN U.S. Stocks Rally Strongly as Trump Signals Possible Softening of April Tariff Plans
U.S. stock markets kicked off the week with strong gains as investors responded positively to media reports suggesting that President Donald Trump may scale back his planned reciprocal tariffs set to take effect on April 2. The White House has neither confirmed nor denied whether changes to the policy are under consideration.
The Dow Jones Industrial Average surged by 500 points, or 1.3%, while the Nasdaq Composite jumped more than 350 points (around 2%), and the S&P 500 climbed by nearly 100 points, posting a 1.6% gain.
In the bond market, U.S. Treasury yields rose across the board, with the 10-year yield breaking above 4.32%.
Optimism Builds as Tariff Adjustments Loom
“Stock index futures jumped sharply this morning, thanks to reports hinting at a possible delay or moderation in planned tariffs, which encouraged fresh buying,” said an analyst at OEXN. “This is the final full trading week of March, and with bulls still trailing by 4% to 6% across major indices, there’s pressure to close the month strong.”
Trump Considers Scaling Down Reciprocal Tariffs
Reports suggest that the Trump administration is weighing revisions to its upcoming reciprocal tariff strategy. Instead of targeting specific industries, the new approach may impose duties on around 15% of countries that maintain long-standing trade deficits with the United States.
Bloomberg also reported that the White House could exempt certain nations from the tariffs altogether.
Speaking from the Oval Office on March 21, Trump mentioned that there would be a level of “flexibility” in his tariff plan.
“A lot of countries are asking for exceptions,” he said. “But once you give one a pass, others will demand the same. I’m not changing my position — but flexibility is an important word.”
Earlier this month, Trump temporarily exempted U.S. automakers from certain tariffs, though he insisted that this did not signal a shift in his stance.
Additionally, he announced a new trade penalty: any country purchasing oil from Venezuela will face an extra 25% tariff on any further trade with the U.S., citing Venezuela's alleged smuggling of violent criminals into the country.
As a result, U.S. crude prices climbed over 1%, trading above $69 per barrel.
Tariff Uncertainty Fuels Market Volatility
Since returning to the White House following his 2024 election victory, Trump has revived aggressive trade measures, including a 25% tariff on all steel and aluminum, a 20% tariff on Chinese goods, and as of March 4, universal 25% tariffs on Canadian and Mexican imports—although he later paused levies on items compliant with the USMCA agreement.
On social media, Trump has dubbed April 2 as “Liberation Day,” marking the official start of his reciprocal trade measures.
These shifting trade dynamics have introduced fresh volatility to Wall Street, with investors fearing that tariffs could exacerbate inflation and hinder economic growth. Both the Nasdaq and S&P 500 recently entered correction territory amid these concerns.
“With April 2 approaching fast, markets could see renewed turbulence,” the OEXN analyst warned.
Inflation Outlook Improving, Growth Projections Revised Down
While the impact of tariffs is yet to be fully reflected in economic data, early indicators suggest inflation may be easing.
Later this week, the Federal Reserve’s preferred inflation gauge, the PCE Price Index, will be released. Forecasts expect the headline PCE to fall to 2.4%, with core PCE holding steady at 2.6%.
At its March 19 meeting, the Fed left interest rates unchanged for the second consecutive time. Chair Jerome Powell told reporters that the central bank is waiting for further progress on inflation and clearer insights into the net impact of the new administration’s fiscal, immigration, regulatory, and trade policies.
Powell described tariff-driven inflation as potentially “transitory”, suggesting it may not warrant immediate action.
“If inflation is expected to fade quickly on its own, it can be appropriate to look through it,” Powell said. “That may apply in the case of tariffs — depending on how rapidly the effects pass through and whether inflation expectations remain anchored.”
In its updated economic projections, the Fed lowered its 2025 GDP growth forecast from 2.1% to 1.7%, while raising its core PCE inflation estimate from 2.5% to 2.8%.
Waiting for ‘Liberation Day’ to Test Tariff Impact
With April 2 — "Liberation Day" — drawing near, markets and policymakers alike are bracing for the real impact of the tariffs to unfold. As Fed Chair Powell signaled a wait-and-see approach, he may now observe how deeply these trade measures shape the inflation and growth trajectory before committing to any further policy shifts.Publication date:
2025-03-25 12:59:44 (GMT)
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