(Bloomberg) — Stocks rallied as traders snapped up battered tech shares, while signs that US tariffs will be more targeted than anticipated reduced the appetite for safety. Bonds fell. Oil climbed as President Donald Trump said he would seek a 25% tariff on nations buying crude and gas from Venezuela.
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Wall Street’s risk-on bid lifted equities of all major groups — from small to big caps — in a rebound after a selloff that drove the market from all-time highs and challenged the notion of US exceptionalism. The S&P 500 rose about 1.5%. Tesla Inc. led gains in megacaps, following a slide that put the “Magnificent Seven” technology giants on track for their worst quarter since 2022. A closely watched gauge of chipmakers climbed 3%. The crypto world surged.
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“Animal spirits are catching tailwinds to start the week as traders step up to the plate and swing hard at risk assets,” said Jose Torres at Interactive Brokers.
Equity strategists at firms including JPMorgan Chase & Co., Morgan Stanley and Evercore ISI are advising clients that the worst of the recent downturn is likely behind them, citing metrics from investor sentiment and positioning to favorable seasonality.
“Stocks look to continue to rally from oversold levels, and any reduction in potential tariff impacts will be an upward catalyst,” said Ivan Feinseth at Tigress Financial Partners. “I believe we have seen the worst of the market’s pullback, though we will continue to see increased volatility at the beginning of next month based on the outcome of President Trump’s tariff policies.”
The S&P 500 rose 1.5%. The Nasdaq 100 climbed 1.9%. The Dow Jones Industrial Average added 1.1%. A gauge of the Magnificent Seven megacaps gained 3%. The Russell 2000 advanced 2.1%.
The US 10-year yield rose eight basis points to 4.33%. Treasuries also came under pressure with around 10 potential companies looking to raise capital in the investment-grade primary market Monday. The dollar wavered.
Trump’s coming wave of tariffs is poised to be more targeted than the barrage he has occasionally threatened, aides and allies say, a potential relief for markets gripped by anxiety about an all-out tariff war.
