US Stocks Rally After Tariff Reprieve – Nasdaq Up 1.35%
US stock indices rallied in trading yesterday as President Trump granted both Mexico and Canada a one-month reprieve on a 25% tariff on imports. The Dow closed up 0.30%, while the more tech-oriented S&P and Nasdaq rose more strongly, finishing up 0.72% and 1.35%, respectively.
The dollar pulled back sharply, with the DXY closing down 0.62% at 107.99. US Treasury yields also retreated from Monday’s gains, with the two-year yield falling 3.7 basis points to 4.212%, and the benchmark 10-year dropping 4.4 basis points to 4.511%.
Oil prices had a mixed day, with Brent edging up 0.12% to $76.06, while WTI fell 0.64% to $72.69, further widening the gap between the two major contracts. Gold remained the standout performer, as continued market uncertainty led investors to seek the world’s favourite safe-haven asset. It reached another record high of $2,845.14 and remained close to that level at the New York close, trading at $2,841.14.
Data Moves into Investor Focus as the Week Progresses
As the week unfolds, investors are shifting their focus to economic data, adjusting to the recent tariff developments while seeking further direction from underlying fundamentals. Tariff news has significantly influenced market movements in recent days, and unless there are further developments on the US-China front—which remains a distinct possibility—upcoming US economic data is likely to play a more significant role in shaping market sentiment.
With the first week of the month underway, the primary focus is on US jobs data, culminating in Friday’s highly anticipated Non-Farm Payrolls (NFP) report. However, other employment figures, including last night’s JOLTS Job Openings, tonight’s ADP data, and Thursday’s unemployment claims, will also be closely watched. While it would take a major surprise to alter expectations of a Federal Reserve rate cut, if data consistently moves in one direction, coupled with confirmation on the trade front, it could influence the Fed’s policy decisions in the coming months.
Data Calendar Heats Up from Today
The macroeconomic calendar begins to pick up pace today in the US, leading into Friday’s key employment data release. Earlier in the Asian session, New Zealand’s employment data was published, with the unemployment rate rising to a four-year high of 5.1%, as expected.
There is little on the calendar for the remainder of the Asian and European sessions today, but key US data releases are scheduled once markets open. First up is the ADP Non-Farm Employment Change report, a traditional precursor to Friday’s NFP, with expectations for an additional 148,000 jobs to have been created last month. Later in the session, the ISM Services PMI data will be released, with market expectations pointing to a reading of 54.2. US oil inventory data is also due, and the session concludes with scheduled speeches from Federal Reserve officials Goolsbee and Bowman.
