NEW YORK: Wall Street’s main indexes rose on Monday but were well off session highs as an early rally in technology stocks after the White House exempted smartphones and computers from new tariffs gave way to worries about economic growth and future levies.
The United States unveiled the exemptions on Friday, but President Donald Trump said he would announce tariff rates for imported semiconductors later in the week.
The exempted tech products will face new duties within the next two months, US Commerce Secretary Howard Lutnick said. These product categories make up about 20% of US imports from China, according to Deutsche Bank.
Indexes had jumped at the open, with the tech-heavy Nasdaq up over 2%, but they pared gains in late morning trading. “We’re continuously told by the (Trump) administration that these pauses are temporary and they’re not concessions long term…the market is grappling with that,” said Quint Tatro, chief investment officer, Joule Financial. Apple was up 2.2%, while PC maker HP and retailer Best Buy gained 1.5% and 1.8%, respectively. Most other megacap stocks reversed course, with Nvidia falling 0.8% and Amazon.com down 1.9%, while the Philadelphia SE Semiconductor index was 0.4% lower.
At 12:05 p.m. the Dow Jones Industrial Average rose 110.00 points, or 0.27%, to 40,322.71, the S&P 500 gained 20.44 points, or 0.38%, to 5,383.78, and the Nasdaq Composite gained 35.29 points, or 0.21%, to 16,759.75. The tariff exemptions on certain electronics, while welcome, are emblematic of Trump’s back-and-forth trade policies that have escalated tensions between the US and China and triggered the wildest swings on Wall Street in years.
The S&P 500 notched its biggest weekly gain on Friday since November 2023, after its worst selloff since 2020 the week before that. The index has dropped more than 5% since April 2’s “Liberation Day” tariff announcement. The CBOE Volatility Index, Wall Street’s “fear gauge”, eased from eight-month highs hit last week and was last at 32.95.
With markets closed on Good Friday, the shorter trading week ahead will be scrutinized for signs on how policymakers, businesses and consumers assess the economic outlook amid such policy uncertainty. Goldman Sachs’ shares rose 1% after the bank reported higher first-quarter profit. Quarterly earnings from companies including Netflix are also on the radar this week.
Citigroup downgraded US equities to “neutral” from “overweight” on expectations that tariffs would hit earnings growth. “We have the tariffs we’re dealing with, but we also have a backdrop of a concerning economic environment, which ultimately can equate to (a) slowdown in earnings,” Tatro said.
Among other stocks, obesity drugmakers gained after Pfizer said it would end the development of its experimental weight-loss pill. Eli Lilly and Viking Therapeutics were up 1.4% and 7.6%, respectively.
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