U.S. stocks saw a notable rise on Tuesday, primarily driven by the White House’s decision to exempt certain electronics from new tariffs. This move provided a significant boost to investor confidence, leading to gains across major indexes. In Asia, shares also advanced, buoyed by positive developments in the auto industry as President Trump hinted at possible exemptions for existing auto-related tariffs. These combined factors contributed to a more optimistic outlook for markets, despite ongoing concerns about future trade policies.
U.S. stocks concluded on a positive note on Monday, with Apple providing a significant lift to the S&P 500 as the White House announced exemptions for smartphones and computers from new tariffs. Despite this boost, uncertainty regarding future tariffs tempered overall optimism, leading the main indexes to finish below their daily peaks. Investors remain apprehensive about how businesses will navigate their supply chains, particularly as further changes in tariffs loom on the horizon.
The United States revealed these exemptions on Friday; however, President Donald Trump indicated on Sunday that he would disclose the tariff rate on imported semiconductors within the week.
Asia shares edge higher on auto gains
Asian shares saw a modest rise on Tuesday, boosted by gains in the automotive sector after U.S. President Donald Trump hinted at possible exemptions for existing auto-related levies. U.S. Treasury bonds stabilized, recovering from last week’s historic selloff, while the dollar continued to lose favor among investors.
“Investors are increasingly pulling away from long-term bonds and are instead turning to safer havens,” remarked Lale Akoner, global market analyst at eToro to Economy Middle East. “High-yield savings accounts, dividend-paying stocks, and companies with robust cash flow—particularly in resilient sectors like healthcare and defence—are now in sharper focus,” she further noted.
Financial markets are grappling with heightened uncertainty as inflationary pressures and escalating global trade tensions weigh heavily on investor sentiment, according to Akoner.
President Trump stated on Monday that he was contemplating adjustments to the 25 percent tariffs imposed on foreign auto and auto parts imports from Mexico, Canada, and other regions. These tariffs could increase car prices by thousands of dollars. Trump remarked that car manufacturers “need a little bit of time because they’re going to make ’em here.”
This followed Friday’s decision to exempt smartphones, computers, and other electronics from Trump’s “reciprocal” U.S. tariffs. Nevertheless, his administration has intensified investigations into semiconductor imports, as Trump reiterated on Sunday that he would announce their tariff rate soon.
Read more | Stock market today: Dollar dips, tech shares rise on Trump tariff exemptions
Market reactions and economic outlook
“When we start to see some of these exemptions flow through for particular sectors, it helps markets think about tariffs as something that aren’t necessarily going to be all-encompassing, and that they might actually be reprieved,” Reuters reported, citing Illiana Jain, an economist at Westpac. Investors seized any positive news available following last week’s significant market selloff, contributing to a slight uptick in shares. MSCI’s broadest index of Asia-Pacific shares outside Japan rose by 0.3 percent.
Japan’s Nikkei climbed 1 percent, with auto manufacturers such as Toyota and parts supplier Denso among the leading gainers on the index. However, gains remained constrained due to ongoing uncertainty surrounding Trump’s trade policies and his fluctuating stance on tariffs, which continue to cast a shadow over markets and the broader economic outlook.
U.S. futures exhibited volatility, oscillating between losses and gains before ultimately closing lower after a prior overnight gain on Wall Street. Both Nasdaq futures and S&P 500 futures declined by approximately 0.2 percent. In Europe, EUROSTOXX 50 futures dropped by 0.14 percent, while FTSE futures increased by 0.25 percent.
Investors brace for additional earnings reports this week, with Bank of America and Citigroup among the major banks set to announce results. Notably, figures from chipmaker TSMC later in the week are expected to attract attention. China’s CSI300 blue-chip index and Shanghai Composite Index each fell by over 0.4 percent, while Hong Kong’s Hang Seng Index reversed early gains to decline by 0.16 percent.
