Global stocks rally but dollar muted as smartphones, computers get tariff break
US shares joined a rally in Europe and Asia on Monday after the White House exempted smartphones and computers from US tariffs, though gains were capped and the dollar was muted as President Donald Trump said that levies were still likely.
Boosted by technology shares, the Dow Jones Industrial Average rose 1%, the S&P 500 gained 1.6% and the Nasdaq Composite added more than 2%. Apple shares jumped around 5% . The S&P 500 rallied 5.7% last week, but was still more than 5% below where it was before what Trump calls “reciprocal” tariffs were first announced in early April.
On the face of it, the exemption of 20 product types accounting for 23% of US imports from China was a boon to manufacturers. But the technology tariff news gave only a modicum of help to US government bonds trying to recover from the bruising they suffered last week, and the dollar was little changed once more as the off-again, on-again trade policy gyrations left investors confused and analysts bearish on the long run.
The 90-day pause on reciprocal tariffs and further concessions over the weekend “lessen the near-term probability of a recession,” Morgan Stanley US equity strategists wrote in a note on Monday. Still, they noted that the back-and-forth on policy is still likely to exacerbate uncertainty for businesses and consumers.
“The equity market will likely remain in a wide trading range with high volatility until we have more certainty on the depth of the growth slowdown and the timing of a recovery,” they wrote.
The relative optimism was felt in Europe and Asia as well, outperforming also because they missed the tail end of the bounce on Wall Street on Friday.
Europe’s broad STOXX 600 index rose about 2.5%, having lost 2% last week, and MSCI’s broadest index of Asia-Pacific shares outside Japan gained 1.5% after shedding more than 4% last week. Tech firms and the broader supply chain were the biggest gainers in Europe, after giants in Apple’s supply chain surged in Asia.
The market also has more earnings to weather this week.
Goldman Sachs, on Monday said profit rose 15% in the first quarter, fuelled by stock traders who capitalised on volatile markets.
Investors poorer by Rs 11L-cr since April 1
Investors’ wealth eroded by Rs 11.30 lakh crore since early this month, where the BSE benchmark Sensex tumbled nearly 2 per cent, as stock markets experienced turbulence in recent times initially due to Trump unveiling a massive tariff plan, followed by growing concerns of a tit-for-tat trade war between China and the US. Since April 2, the BSE benchmark gauge has slumped 1.90 per cent.
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