US markets edge higher despite bleak labour and inflation outlook

US stocks rallied initial hours of trading as investors welcomed a surprise move by President Donald Trump to temporarily exempt key technology products from new tariffs. The exemption, which includes smartphones, computers, and semiconductors gave a major lift to tech-heavy indices and set a bullish tone for the start of the week.
As of 1:15 PM ET, the Dow Jones Industrial Average was up 135.58 points at 40,348.29, gaining 0.34%, while the S&P 500 added 19.32 points or 0.36%, trading at 5,382.68. The Nasdaq Composite saw a more modest rise of 0.1%, standing at 16,741.32.
Markets pushed higher despite sobering data from the New York Fed’s consumer expectations survey, which revealed that Americans now assign a 44% probability to the unemployment rate being higher a year from now — the most pessimistic view since April 2020, in the early stages of the Covid-19 pandemic. The survey also noted deteriorating sentiment toward the stock market, hitting its lowest point since June 2022, and rising concerns over near-term inflation.
Commodities took a hit, with gold falling $20.60 or 0.63% to $3,224, while oil declined 0.99% to $60.89 per barrel, reflecting broader market uncertainty and possible concerns over global demand.
Meanwhile, bond yields slipped as investors sought safety. The yield on the US 10-Year Treasury fell sharply by 8.8 basis points to 4.405%, its largest one-day drop in recent weeks. The EUR/USD exchange rate edged lower to 1.134, while the VIX — Wall Street’s so-called fear gauge — dropped 10.12% to 33.76, indicating a short-term easing in market volatility.
Meanwhile, European markets surged in early trade: Germany’s DAX climbed 2.5%, France’s CAC 40 rose 2.3%, and London’s FTSE 100 added 1.9%, as per news agency AP. The rally was driven by renewed confidence in the tech sector, with investors anticipating short-term stability in supply chains and production costs.
In Asia, the momentum was equally robust. Japan’s Nikkei 225 closed 1.2% higher, Hong Kong’s Hang Seng rose 2.4%, and Shanghai’s Composite Index gained 0.8%. Notably, South Korean tech majors like Samsung Electronics and Advantest posted strong gains, benefitting from their deep links to the global semiconductor industry.
China’s March export growth, up 12.4% year-on-year, added to the region’s positive tone. The strong trade data underscored resilience in manufacturing, even amid ongoing tariff friction.
The US exemption announcement came shortly after China imposed tariffs of up to 125% on US goods in retaliation for escalating US duties, which have reached 145% on certain Chinese products. Though the latest move was framed as a temporary reprieve, President Trump emphasized over the weekend that no country—“especially not China”—would escape future tariffs.
Administration officials confirmed that new levies, especially on strategic goods like semiconductors, would be unveiled within weeks. Trump cited national security concerns and reiterated the goal of reshoring chip and pharmaceutical production.
Investor sentiment steady
Markets responded positively to the breathing room, despite lingering uncertainty. Last Friday, Wall Street closed on a high note: the S&P 500 rose 1.8%, the Dow added 1.6%, and the Nasdaq Composite jumped 2.1%. Strong quarterly earnings from JPMorgan Chase and Morgan Stanley helped bolster confidence.
The 10-year US Treasury yield, which had surged above 4.58% last week, eased to 4.44% Monday morning. While the bond market remains jittery, the retreat in yields suggests investors are cautiously rebalancing after sharp risk-off moves.
Currency markets also reflected shifting dynamics. The US dollar dipped slightly, with the yen strengthening to 143.16 per dollar. The euro firmed to $1.1388, and the British pound advanced to $1.3184.
Commodities
Oil prices ticked higher on improved demand outlooks. West Texas Intermediate rose 1.0% to $62.10, while Brent crude added 0.9% to $65.36. The gains reflect optimism that easing trade friction, even if temporary, could support industrial activity.
Gold, often a refuge in volatile times, edged down by $9 to $3,235 per ounce, as traders rotated back into equities and risk assets.