Key Points
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President Donald Trump earlier recommended placing tariffs of 50% on the E.U.
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However, he temporarily suspended these 50% tariffs and reverted to 10%.
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As a result, the stock market has rallied.
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President Donald Trump threatened to impose a 50% tariff on all goods originating from the E.U. in a social post on Friday, May 23. He said that the E.U. has been “very difficult” to deal with on trade, and that the negotiations were “going nowhere”. The tariff was originally set to take effect on June 1. This was after he had announced a 20% tariff on most EU products, which he then reduced to 10% until July 8.
The stock market turned red due to the news before the stock market closed for the weekend.
However, he suspended his 50% tariff on Sunday, May 25, after he had a phone call with European Commission President Ursula von der Leyen, who had requested an extension and expressed her desire to engage in “serious negotiations”.
Trump posted on Truth Social: “I agreed to the extension — July 9, 2025 — It was my privilege to do so”. He said, “I was extremely satisfied with the 50% Tariff allotment on the European Union, especially since they were ‘slow walking’ I have just been informed that the EU has called to quickly establish meeting dates. This is a positive event, and I hope that they will.”
Here’s a market update as of 10:30 AM (ET) today.
- The S&P 500 is up 87.25 points, or 1.5%.
- The Nasdaq Composite is up 366.99 points, or 1.95%.
- The Dow Jones Industrial Average is up 469.29 points, or 1.13%.
Macros
- U.S. CB Consumer Confidence came in at 98 vs. the 87.05 forecast. This improvement is very bullish and has offset the previous reports of falling consumer confidence.
- U.S. Case-Shiller (benchmark of average single-family home prices in the U.S.) 20-City year-over-year came in at 4.07% vs. the 4.5% forecast.
- U.S. Durable Goods came in at -6.3% vs. the -7.8% forecast.
- U.S. Core Durable Goods came in at 0.2% vs. the 0% forecast.
- U.S. House Price Index year-over-year at 3.7% vs. 3.9% previously.
Comments From the Fed’s Barkin
Richmond Fed’s Tom Barkin made the following notable comments:
- “The published data shows an economy that is on the same trajectory as the last year or two.”
- “People are being patient on investment decisions.”
- “People are waiting out policy uncertainty.”
- “Government spending cuts are having an impact on employment and job postings, particularly in the DC area.”
- “We are seeing tariffs and inflation reflected in consumer sentiment.”
- “There is no evidence that the drop in sentiment is affecting spending.”
- “Businesses still are largely pulling to the sidelines”.
Other Assets
- Gold Futures are down 2.1% to $3,295.
- Crude Oil Futures are down 1%.
- Natural Gas Futures are up 2.25%.
- Bitcoin is down 0.3% to $109,109.
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