BY ALUN JOHN AND WAYNE COLE
LONDON/SYDNEY – Major stock indexes bounced in Europe and Asia on Monday after the White House exempted smartphones and computers from “reciprocal” US tariffs, though gains were limited as President Donald Trump warned levies were still likely.
Indeed, Trump on Sunday told reporters tariffs on semiconductors would be announced over the next week and a decision on phones made “soon”.
On the face of it, the exemption of 20 product types accounting for 23 of US imports from China was a boon to manufacturers.
However, the uncertainty was still exerting downward pressure on the dollar and US government bonds, and the off-again, on-again trade policy gyrations have left investors confused and analysts bearish on the long run.
“I think the likelihood that deals get agreed and lead to lower tariffs down the road has grown a bit, and I feel relatively good about the news flow,” said Samy Chaar, chief economist at Lombard Odier.
“Still the risk scenario of things breaking down hasn’t gone away, we’re still worried about both the overall level of tariffs and also how long we remain with this uncertainty because that itself is causing damage.”
“If you’re a US company, you’ve postponed hiring, and capital expenditure, and I worry about when companies have to start cutting costs, that’s the point you don’t want to reach.”
Still, just the prospect of a pause was enough to lift S&P 500 futures 1.4 , while Nasdaq futures rose 1.8 . The S&P 500 rallied 5.7 last week, but was still more than 5 below where it was before the reciprocal tariffs were first announced in early April. .N
The optimism was also felt in Europe and Asia, outperforming also because they missed the tail end of the bounce on Wall Street on Friday.
Europe’s broad STOXX 600 index rose 2 , having lost 2 last week, and MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS gained 1.5 after shedding more than 4 last week. .EU
Tech firms and the broader supply chain were the biggest gainers, up 2.8 in Europe, after giants in Apple’s supply chain surged in Asia.
Apple’s own shares jumped nearly 6 in very early premarket trading.
The market also has more earnings to weather this week with Goldman Sachs, Bank of America and Citigroup among the big banks reporting. Numbers from chipmaker TSMC 2330.TW will be a highlight given Trump’s plan to investigate the entire global semiconductor supply chain.
In terms of economic data, March numbers showed a 12.4 jump in Chinese exports during March as firms rushed in orders ahead of Trump’s tariffs.
