Wall Street: Big tech leads stocks relief rally after weekend tariff pause

The benchmark’s rate has jumped to 4.49%, threatening to deal another blow to the US economy by pushing up borrowing costs more broadly.

The technology giants hit hardest in this year’s selloff were leading the rest of the stock market higher Monday, after temporary reciprocal tariff exemptions were made for phones, computers and popular consumer electronics.

The S&P 500 Index climbed 1.5% as of 9:33 a.m. in New York, while the technology-heavy Nasdaq 100 Index jumped 1.9%. Shares of Apple Inc. soared as much as 7.5%, with Magnificent Seven peers Nvidia Corp. and Amazon Inc. also rising.

President Donald Trump downplayed the weekend exemption, saying he will still apply tariffs to a range of high-tech gadgets, as part of his overall push to remake US trade.

The US Customs and Border Protection announced a tariff exclusion for some electronics on Friday, only for US Commerce Secretary Howard Lutnick and the president on Sunday to follow up by saying the reprieve was temporary and a procedural step in the longstanding plan to apply a different, specific levy to the sector.

The trading desk of JPMorgan Chase & Co. said early Monday that technology stocks are poised to lead a relief rally that this time is likely to last more than one session as volatility dissipates. Whether it turns into another bull run depends on whether there is a “material reset” in US-China trade negotiations, according to head of global market intelligence Andrew Tyler.

“If reduced to the global 10% level, then risk assets will reprice higher,” he said.

“We are in a much better spot than Friday,” Daniel Ives at Wedbush Securities wrote in a note. “But still, there is mass uncertainty, chaos, and confusion about the next steps ahead, with all focus on China tariff negotiations being front and center, and any progress on this game of high stakes poker between Beijing and DC being crucial to the markets and the economy this week.”

US stocks are coming out of an intensely volatile week, when the benchmark indexes swung wildly amid news on tariffs. The swing was most extreme after Trump on Wednesday announced a 90-day pause on the levies for most countries except China. Stocks soared on that, with the S&P 500 notching its best one-day gain in 17 years and capping its best week since 2023.

Typically, extreme rallies are associated with periods of market distress. The S&P 500’s best days in history have usually preceded weaker-than-average returns in the near term.

Following its 15 largest daily gains, the US stock benchmark was higher six months later just 43% of the time, Bloomberg Intelligence data going back to 1928 show. That’s lower than the 67% probability on any given day that the gauge will advance over the subsequent half year.

In the midst of this, the first-quarter earnings season has just kicked off, with major American corporations such as Bank of America Corp., Johnson & Johnson and United Airlines Holdings Inc. set to report this week.

“First-quarter reporting season has begun and in a reporting season like no other, results will not matter,” said Julian Emanuel, chief equity and quantitative strategist at Evercore ISI. “Focus is likely to hinge heavily on guidance and how companies are navigating tariffs and demand outlook from a shaky growth environment.”

Meanwhile, data from Deutsche Bank shows equity positioning is below the bottom of its typical range, as discretionary investors raised positioning modestly after the reciprocal tariff reprieve but systematic strategies continued to trim sharply.

“The equity selloff so far has been driven largely by a sharp cut in positioning,” said Parag Thatte, strategist at Deutsche Bank. “However, inflows, that is new money, have continued to move into equities right through the selloff.”

Market watchers are continuing to advise caution, especially amid signs that bond markets are under stress. The tariff turmoil pushed 10-year US Treasury yields to the biggest weekly surge in over two decades as investors pulled back from US assets.

The benchmark’s rate has jumped to 4.49%, threatening to deal another blow to the US economy by pushing up borrowing costs more broadly. It also raises doubts on Treasuries’ status as the world’s safe haven, as they were battered along with the stock market for much of last week.

“Although some of the worst-case scenarios will probably not come to fruition, it does not mean that the stock market will bounce back as aggressively or sustainably as it has after other deep corrections/bear markets of the past 7 to 8 years,” said Matt Maley, chief market strategist at Miller Tabak + Co. “The ‘reset process’ will continue and investors should act accordingly.”