Stocks jump, US Treasury yields climb on tariff optimism

By Chuck Mikolajczak

NEW YORK (Reuters) -Global stocks rallied on Monday, led by gains in U.S. stocks, while U.S. Treasury yields climbed after reports that President Donald Trump’s tariff plan may use a more targeted approach than previously thought, boosting risk appetite.

Trump said automobile tariffs are coming soon, and said he may give “a lot of countries” breaks on tariffs, but provided no details.

“Investors are experiencing a slight sigh of relief, but at the same time they are cynical about how long this may last,” said Sam Stovall, chief investment strategist at CFRA Research.

“The causes of this manufactured correction have not evaporated. They are tariffs and what the impact of tariffs could be on economic growth, inflation and corporate profits.”

Equities have been under pressure in recent weeks, weighed down by uncertainty over the potential levies and the damage they could inflict on the global economy as well as corporate profits.

A string of economic indicators has also pointed to cooling consumer sentiment as tariff concerns grew.

Data on Monday showed S&P Global’s flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, increased to 53.5 this month from 51.6 in February. A reading above 50 indicates expansion.

However, concerns about tariffs and the sharp cuts in government spending continued to dent sentiment, as the survey’s business confidence measure dropped to the second lowest reading since 2022.

The Dow Jones Industrial Average rose 597.97 points, or 1.42%, to 42,583.32, the S&P 500 rose 100.01 points, or 1.76%, to 5,767.57 and the Nasdaq Composite rose 404.54 points, or 2.27%, to 18,188.59. Nasdaq touched its highest level since March 7.

MSCI’s gauge of stocks across the globe gained 9.84 points, or 1.17%, to 851.83 after hitting a two-week high of 852.39.

The MSCI index had fallen nearly 8% from its mid-February record through its March 13 closing low, before snapping a four-week string of declines last week.

Tariff uncertainty still weighed on other global stock indexes, however, and the pan-European STOXX 600 index closed down 0.13%.

European shares had risen earlier in the session after HCOB’s preliminary composite euro zone Purchasing Managers’ Index, compiled by S&P Global, rose to 50.4 this month from February’s 50.2, its highest since August.

Trump still plans to impose new reciprocal tariffs next week, but questions remain about the size of the duties and which countries will be targeted.

In addition, Trump said on Monday that any country that buys oil or gas from Venezuela will pay a 25% tariff on exports to the United States.