Good morning. After a long holiday weekend, U.S. equity markets reopened with strength on Tuesday after the White House announced it would delay the proposed 50% tariff on European imports until July 9. Markets welcomed the reprieve, shaking off last week’s trade jitters and closing higher across the board. Growth sectors led, with strong gains in tech and consumer discretionary stocks. Investors also cheered a rebound in consumer confidence, while bond yields dipped amid increased buying in both equities and Treasuries.

Looking ahead, all eyes are on Nvidia’s earnings after the bell today, a critical test for the market’s tech leadership. The rest of the week brings the Fed’s latest meeting minutes, Q1 GDP data, and the Fed’s preferred inflation gauge (PCE). Markets will also continue tracking the evolving tax bill in the Senate, which could carry implications for yields and risk sentiment.

Tariff Threats Return
President Trump’s threat to impose a 50% tariff on European goods continues to roil markets. The WSJ reports that European leaders are bracing for a new trade war as U.S.-EU talks break down.
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Home Prices Dip in Major Markets
According to the latest Case-Shiller data, home prices declined across the 20 largest U.S. metro areas for the first time in over two years. MarketWatch outlines which cities are expected to see further price pressure.
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All Eyes on Nvidia
Nvidia’s earnings, due after market close, are the next major catalyst for markets. Big tech has powered the recent rally, but CNBC warns that further curbs on chip exports to China could complicate Nvidia’s near-term guidance.
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Steel Signals Weakness in China
Bloomberg reports that rebar prices in China have dropped to their lowest levels since 2017, adding to concerns about the strength of the country’s industrial recovery.
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U.S. stocks rallied Tuesday after the White House delayed its planned 50% tariff on European Union imports to July 9, buying time for renewed negotiations. The S&P 500 rose 1.9%, the Nasdaq gained over 2.4%, and small-cap stocks outperformed, with the Russell 2000 Index climbing more than 2%. Sector leadership was broad-based but tilted toward growth areas like technology and consumer discretionary. European and Asian markets also closed higher, supported by the tariff delay and an improvement in German consumer sentiment.

Economic data came in better than expected. Durable goods orders fell by 6.3% in April, beating forecasts for an 8.1% drop. Excluding transportation, orders rose 0.2%. The Conference Board’s Consumer Confidence Index jumped to 98.0 in May from 85.7 in April, well above consensus estimates of 88. The strong report helped offset weaker capital goods orders, which declined 1.3%, and added to optimism that the U.S. consumer remains resilient.

Treasuries rallied alongside equities, with the 10-year yield falling to 4.45%. The dollar rebounded after hitting multi-month lows last week. In commodities, gold sold off sharply, down 1.94% to $3,300.40, as safe-haven demand waned. Oil prices slipped amid concerns of oversupply following signs of progress in Iran nuclear talks and OPEC+ output discussions.

Markets enter the shortened week on stronger footing, lifted by easing trade tensions and solid economic data. But with Nvidia earnings, inflation data, and the Fed’s latest signals all on deck, volatility could return quickly. Investors would be wise to stay nimble and tuned in as policy and earnings season collide.