Good morning. Markets extended their rebound on Tuesday, with the S&P 500 closing higher for the sixth consecutive day — a streak last seen in mid-January. Cyclical sectors such as financials and materials led the way, buoyed by the Trump administration’s announcement of tariff relief for the U.S. auto industry. The move exempts domestic automakers from new steel and aluminum tariffs and introduces lower-than-expected duties on imported auto parts.

Investor focus has shifted toward trade de-escalation and policy reprieve, as talk of pending deals with key trading partners surfaces. At the same time, the earnings engine continues to churn. Alphabet’s strong report boosted sentiment, and tonight’s earnings slate includes marquee names like Microsoft, Meta, and Qualcomm. Bond yields drifted lower, and oil prices pulled back. A flood of economic data is on deck tomorrow, including GDP, PCE inflation, and Chicago PMI.

Tariff Relief Lifts Autos, Market Rally Stretches to Sixth Day
WSJ details how exemptions on auto parts and metal tariffs helped fuel broad-based gains in equities. The policy relief has helped remove a key overhang for the auto and industrial sectors. Analysts say the exemptions could provide a short-term boost to margins and production outlooks.
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America Faces a Looming Economic Shock, Economist Warns
The Economist outlines mounting risks in inflation, labor tightness, and supply chains that could trigger a sharp downturn. The article suggests that delayed policy responses could magnify the eventual impact. Some economists are calling for more aggressive Fed action to counteract potential disruptions.
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Trump’s Tech War Could Reshape the Sector
New restrictions and trade friction are becoming a drag on big tech’s global expansion, The Economist writes. Export controls and retaliatory moves from China are disrupting supply chains and revenue forecasts. Tech executives are pressing for clearer guidance as uncertainty clouds long-term strategy.
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China PMI Miss Adds to Global Growth Jitters
Weaker-than-expected factory data from China may signal further slowdown, WSJ reports. Manufacturing sentiment remains below pre-pandemic norms, especially in export-driven regions. Policymakers in Beijing are reportedly weighing further stimulus to counter soft demand.
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Why Are Stocks Rising Despite Recession Fears?
MarketWatch explores disconnects between falling consumer confidence and strong equity performance. Some analysts argue that equity investors are betting on policy support and AI-fueled productivity gains. Others warn the rally could reverse quickly if earnings falter or macro risks escalate.
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French Economy Grows But Faces Trade Pressure
Bloomberg notes France’s return to growth in Q1 may not hold amid spillover from global tariff skirmishes. Export-heavy industries in particular face headwinds as U.S. and Chinese policies ripple through Europe. Economists remain divided on whether France’s momentum can outlast external shocks.
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U.S. equities finished higher Tuesday, as optimism around tariff relief in the auto sector helped extend the rally. Ten of eleven S&P sectors closed in the green, with financials and materials outperforming. Commerce Secretary Lutnick said some auto-related tariffs were being reconsidered, including exemptions for USMCA-compliant parts. Bond yields fell across the curve, with the 10-year Treasury slipping to 4.17%. Oil dropped more than 2.5% to $60.42, while gold eased to $3,333. The S&P 500 is now up over 12% from its April lows and continues to recover lost ground as investors digest stronger-than-expected earnings and policy revisions. However, sentiment remains cautious, with recession concerns lingering despite recent momentum.

Markets have staged an impressive turnaround, helped by earnings strength and a slightly softer tone from policymakers on tariffs. Still, the macro backdrop remains volatile, with consumer confidence sagging and job openings sliding. Whether this rally has legs likely depends on what emerges from trade negotiations — and whether economic data in the coming days confirms stability or flags fresh risk.