Stocks Edge Higher Amid More Tariff Flip-Flops

Stocks moved higher on Monday even as an early rally in technology stocks lost steam, while investors digested the latest back and forth in President Donald Trump’s trade policy.

Late on Friday, the administration exempted smartphones, computers, semiconductors, and other technology from the “reciprocal” tariffs imposed earlier in April. However, Trump and other officials also said that other tariffs on many of those products would soon be announced. Trump also said on Monday that he would look to ease tariffs he imposed that are hitting auto companies.

The news of the tech product exemptions prompted an early move higher in technology stocks. However, by the close of trading on Monday, gains were led by consumer defensive and real estate names.

The S&P 500 closed 0.8% higher, while the Nasdaq Composite ended the day up 0.6%. The Morningstar US Market Index gained 0.8%.

Much of the attention was on technology on Monday. Apple AAPL, which is seen as especially vulnerable to Trump’s trade war with China, but whose products were given a reprieve from the full 145% tariffs being levied, closed up 2.2%. The stock is down 17% in 2025.

US Treasury yields dipped slightly, with the 10-year bond yield falling from 4.46% to 4.38%. In a development that analysts and investors have been watching closely, Treasury yields have been rising in recent days, despite growing expectations that the US economy is sliding into a recession thanks to the tariffs. One catalyst is the inflationary impact of tariffs. In addition, there is a growing sense that non-US investors are viewing the US bond market as less of a safe haven.

Eurozone bond yields also softened, with the 10-year German Bund easing to 2.51% from 2.57%. Both the Morningstar Europe Index and the Stoxx Europe 600 closed up 2.7%. Germany defense stock Rheinmetall RHM was one of the biggest gainers, closing 5.84% higher.

Is the Stock Market Relief Temporary?

The Trump administration said the exemption was only “temporary,” while China responded that the US had ”taken a very small step” in rectifying its “mistake.”

Chief Morningstar European market strategist Michael Field says, “What we’ve realized over the last few weeks is the capricious nature of the US trade policy.”

Outside the United States, Japan’s Nikkei 225 closed 1.2% higher, after a significant drop last Friday. At the same time, the Hang Seng Index closed up 2.4%, its best one-day performance since March 18. Both the Morningstar Europe Index and the Stoxx Europe 600 rose 2.6%, pushed higher in particular by the financial, energy, and tech sectors. The German, Italian, French, and UK stock markets all closed 2%-3% higher