At its low on Friday, the S&P 500 was down 1.3% and sitting on top of its 200-day moving average (5,773), driven there by President Trump’s announcement that he is recommending a straight 50% tariff rate on the EU because trade talks are going nowhere and his warning to Apple (AAPL) that it will face a tariff of at least 25% if the iPhones it sells in the U.S. are not made in the U.S.
Support came in at that key technical level, and as a White House official told CNBC that the president’s tariff proposal for the EU should be viewed as negotiating leverage and that the stock market was overreacting to it. Turns out that the official had it right.
Today, the equity futures are sharply higher following the news that the president, after a call with European Commission President von der Leyen, will delay the higher tariff rate for the EU until July 9, with the EU now reportedly looking to accelerate the trade talks.
Currently, the S&P 500 futures are up 70 points and are trading 1.2% above fair value, the Nasdaq 100 futures are up 291 points and are trading 1.4% above fair value, and the Dow Jones Industrial Average futures are up 463 points and are trading 1.1% above fair value.
This thrust of buy-the-dip interest has also been supported by a further drop in Treasury yields. The 10-yr note yield is down four basis points to 4.47%, and the 30-yr bond yield is down seven basis points to 4.97%. Treasuries have perked up on the news that Japan is considering reducing its longer-dated bond issuance following last week’s upset in the government bond market, which included a weak 20-year Japanese government bond auction.
The Treasury will be coming to the table this week with a good bit of issuance of its own, starting with a $69 billion 2-yr note auction today, with results at 1:00 p.m. ET, and followed by a $70 billion 5-yr note auction on Wednesday and a $44 billion 7-yr note auction on Thursday.
These auctions will be closely watched, as will NVIDIA’s (NVDA) earnings report and the reaction to it after the close on Wednesday. Dow component Salesforce (CRM) will also report after the close on Wednesday, but it is making headlines today with the news that it is going to acquire Informatica (INFA) for approximately $8 billion, or $25.00 per share in cash.
This morning’s economic data featured the April Durable Goods Orders Report, which was a mixed headline bag.
Total durable goods orders decreased 6.3% month-over-month in April (Briefing.com consensus -8.1%) following a downwardly revised 7.6% increase (from 9.2%) in March, with a 17.1% decline in transportation equipment orders acting as the key drag. Excluding transportation, durable goods orders rose 0.2% month-over-month (Briefing.com consensus 0.0%) following a downwardly revised 0.2% decline (from 0.0%) in March.
The key takeaway from the report is that there was a big dropoff in business spending, evidenced by the 1.3% decline in new orders for nondefense capital goods excluding aircraft.
Separately, Tesla (TSLA) has commanded some added attention following a Bloomberg report that its sales in Europe in April were cut nearly in half; however, the focal point for investors is Elon Musk’s announcement that he will be focusing 24/7 again on his companies. Shares of TSLA are up 2.3% in pre-market action.
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Originally Posted on May 27, 2025 – Stocks rally as EU tariff hike deadline gets pushed out
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