Tech Tariff Exemptions May Lead To Initial Strength On Wall Street

The major U.S. index futures are currently pointing to a sharply higher open on Monday, with stocks likely to add to the strong gains posted last Friday.

Technology stocks are likely to lead the way higher after U.S. Customs and Border Protection guidance issued late Friday revealed certain tech products will be excluded from President Donald Trump’s “reciprocal tariffs.”

The excluded products purportedly include smartphones and computers as well as other devices and components like semiconductors.

However, adding to the uncertainty surrounding tariffs, Trump claimed in a post on Truth Social that there was “no Tariff ‘exception’ announced,” noting the products are still subject to exiting 20 percent fentanyl tariffs are just moving to a “different Tariff ‘bucket.'”

“NOBODY is getting ‘off the hook’ for the unfair Trade Balances, and Non Monetary Tariff Barriers, that other Countries have used against us, especially not China which, by far, treats us the worst!” Trump said.

“We are taking a look at Semiconductors and the WHOLE ELECTRONICS SUPPLY CHAIN in the upcoming National Security Tariff Investigations,” he added. “What has been exposed is that we need to make products in the United States, and that we will not be held hostage by other Countries.”

After showing a lack of direction early in the session, stocks moved sharply higher over the course of the trading day on Friday. The major averages all showed strong moves to the upside, partly offsetting the substantial pullback seen during Thursday’s session.

The major averages moved roughly sideways going into the close, hovering firmly in positive territory. The Nasdaq shot up 337.14 points or 2.1 percent to 16,724.46, the S&P 500 surged 95.31 points or 1.8 percent to 5.363.36 and the Dow jumped 619.05 points or 1.6 percent to 40,212.71.

Largely reflecting the historic rally on Wednesday, the major averages also posted strong gains for the week. The Nasdaq skyrocketed by 7.3 percent, while the S&P and the Dow spiked by 5.7 percent and 5.0 percent, respectively.

The significant strength that emerged on Wall Street came as concerns about rising trade tensions between the U.S. and China were partly offset by comments from White House press secretary Karoline Leavitt saying Trump is “optimistic” about reaching a trade deal with China.

“The president has made it very clear he’s open to a deal with China,” Leavitt told reporters. “If China continues to retaliate, it’s not good for China.”

However, two senior White House officials told CNN that the U.S. will not reach out to China first and that Chinese President Xi Jinping must request a call with Trump.

China has also announced plans to increase tariffs on U.S. imports to 125 percent beginning Saturday, continuing the tit-for-tat exchange on trade seen in recent days.

The 125 percent would match the tariff on China goods announced by President Donald Trump earlier this week, although a White House official told CNBC the effective rate is 145 percent when combined with a 20 percent fentanyl-related tariff.

Meanwhile, the European Union has announced that it is suspending its planned countermeasures to Trump’s tariffs for 90 days.

European Commission trade spokesperson Olof Gill also told Ireland’s RTE radio European Trade Commissioner Maros Sefcovic will travel to Washington on Sunday to “try and sign deals.”

On the U.S. economic front, preliminary data released by the University of Michigan showed a continued slump by U.S. consumer sentiment in the month of April.

The University of Michigan said its consumer sentiment index tumbled to 50.8 in April after plunging to 57.0 in March. Economists had expected the consumer sentiment index to fall to 54.5.

With the much bigger than expected decrease, the consumer sentiment index dropped to its lowest level since hitting 50.0 in June 2022.

The report also said year-ahead inflation expectations surged to 6.7 percent in April from 5.0 percent in March, reaching the highest reading since 1981.

A separate report released by the Labor Department showed an unexpected decrease by producer prices in the month of March, although the data has largely been shrugged off as “old news.”

Gold stocks moved sharply higher along with the price of the precious metal, driving the NYSE Arca Gold Bugs Index up by 6.1 percent to its highest closing level in over twelve years.

A surge by the price of crude oil also contributed to substantial strength among oil service stocks, as reflected by the 4.7 percent spike by the Philadelphia Oil Service Index.

Biotechnology stocks also turned in a particularly strong performance on the day, with the NYSE Arca Biotechnology Index jumping by 3.3 percent.

Brokerage, steel and semiconductor stocks also saw significant strength, moving higher along with most of the other major sectors.

Commodity, Currency Markets

Crude oil futures are jumping $0.95 to $62.45 a barrel after surging $1.43 to $61.50 a barrel last Friday. Meanwhile, after soaring $67.10 to $3,244.60 an ounce in the previous session, gold futures are falling $10.40 to $3,234.20 an ounce.

On the currency front, the U.S. dollar is trading at 143.28 yen versus the 143.54 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.1370 compared to last Friday’s $1.1356.

Asia

Asian stocks advanced on Monday, with technology stocks leading the surge after the Trump administration decided to exempt certain consumer electronics from its so-called reciprocal tariffs.

However, both President Donald Trump and U.S. Commerce Secretary Howard Lutnick clarified that phones, computers and popular consumer electronics will come under separate tariffs, along with semiconductors, that may be imposed in a month or so.

The dollar remained weak in Asian trading and gold held near a record high, while oil prices edged up after Chinese data showed a sharp rebound in crude imports in March.

Chinese shares rose as the U.S. paused some tech tariffs and data showed Chinese exports experienced a remarkable 12.4 percent spike in March as a result of increased shipments ahead of impending U.S. tariffs.

The benchmark Shanghai Composite Index gained 0.8 percent to close at 3,262.81, while Hong Kong’s Hang Seng Index surged 2.4 percent to 21,417.40.

Japanese markets ended higher as iPhone-related shares jumped after the Trump administration excluded smartphones and other electronics from steep tariffs.

The Nikkei 225 Index jumped 1.2 percent to 33,982.36, while the broader Topix Index settled 0.9 percent higher at 2,488.51.

Nvidia supplier Advantest surged 4.9 percent, fellow chip-equipment maker Tokyo Electron added 1.4 percent and Screen Holdings rallied 3.9 percent.

Japan said over the weekend it wasn’t planning to use its U.S. Treasury holdings as a negotiating tool to counter U.S. tariffs.

Seoul stocks rose sharply, with the Kospi climbing 1.0 percent to 2,455.89 on eased tariff woes.

Parts maker LG Innotek Co., which gets the bulk of its revenue from Apple Inc., soared 5.8 percent. Samsung Electronics and LG Energy Solution both rose around 2 percent.

Australian markets started the week on a buoyant note amidst tariff relief and positive commentary from a Federal Reserve official.

The benchmark S&P/ASX 200 Index shot up 1.3 percent to 7,748.60, led by materials and energy stocks. The broader All Ordinaries Index closed up 1.4 percent at 7,959.70.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index closed up 0.7 percent at 12,107.54.

Europe

European stocks have moved sharply on Monday following the U.S. decision to grant tariff exclusions on smartphones, computers, and other electronics—many of which are imported from China.

The German DAX Index is up by 2.5 percent, the French CAC 40 Index is up by 2.1 percent and the U.K.’s FTSE 100 Index is up by 1.7 percent.

Tech stocks have surged, with Dassault Systemes, ASM International, Infineon Technologies, ASML Holding and Logitech jumping 3-7 percent.

Vallourec SA has also soared 5.3 percent. The French manufacturer of tubular solutions said it has entered into negotiations with Aldebaran Capital Partners for the sale of its welding solutions unit Serimax for an enterprise value of 79 million euros.

Meanwhile, German steel producer Salzgitter AG has tumbled 3.3 percent after it has ended talks with a bidding consortium on a possible takeover.

Emerging markets-focused asset manager Ashmore Group has also plunged 6 percent after reporting disappointing fiscal third quarter results.

U.S. Economic News

Richmond Federal Reserve President Thomas Barkin is due to speak on “Driving Through the Economic Fog” before the Greater Greer Chamber of Commerce at 12 pm ET.

At 7:40 pm ET, Atlanta Federal Reserve President Raphael Bostic is scheduled to speak on monetary policy in a moderated conversation hosted by Emory University.