Wall Street rallies as Trump delays EU tariffs; small-caps, tech lead gains

Sentiment was further buoyed by a dip in US Treasury yields and a stronger dollar, as global investors responded to reports that Japan may scale back bond issuance following recent market volatility.

US stocks surged on May 27  as President Donald Trump’s decision to postpone a planned 50% tariff on European Union imports lifted hopes for progress in transatlantic trade talks. The move helped shake off last week’s market jitters, with all three major indices trading sharply higher in the first session after the Memorial Day holiday.

By mid-day in New York, the Dow Jones Industrial Average was up around 300 points, or 0.7%, while the S&P 500 gained 1%. The Nasdaq Composite, led by a rebound in tech names, rose 1.3%.
Sentiment was further buoyed by a dip in US Treasury yields and a stronger dollar, as global investors responded to reports that Japan may scale back bond issuance following recent market volatility.

Small-cap stocks also joined the rally, with the Russell 2000 index climbing 1.7%, taking its month-to-date gains past 5%. However, the index still lags broader benchmarks, remaining down roughly 7% for the year.

In individual names, Tesla shares moved higher after CEO Elon Musk signaled plans to refocus on the company’s operations and reduce political involvement. In contrast, Trump Media & Technology Group shares slid 10% after a CNBC report said the company is raising $2.5 billion from institutional investors to make a large bitcoin investment—one of the biggest such treasury allocations ever by a public firm.

Meanwhile, Dutch pension fund PME, with $65 billion in assets, voiced concerns over US asset managers’ silence on issues like climate change and judicial independence, suggesting some are yielding to political pressure from the Trump administration.

Asia-Pacific markets mixed as investors digest tariff news

Earlier in the day, Asia-Pacific equities ended mixed as investors assessed the broader implications of Trump’s tariff delay on EU goods.

Japan’s Nikkei 225 rose 0.51% to 37,724.11, while the Topix gained 0.64%. South Korea’s Kospi declined 0.27%, reversing from a three-month high, while the Kosdaq inched up 0.25%.

Mainland China’s CSI 300 fell 0.54%, despite a modest uptick in April industrial profits, which rose 1.4% year-on-year. Hong Kong’s Hang Seng Index advanced 0.43% to 23,381.99.

In India, the Nifty 50 and BSE Sensex were trading lower, down 0.6% and 0.79% respectively as of early afternoon.

Meanwhile, Australia’s S&P/ASX 200 closed 0.56% higher at 8,407.6, marking a third straight session in the green.

Europe ends higher as tariff worries ease, defense stocks rally

European markets closed broadly higher, rounding off a steadier session amid easing fears around US-EU trade tensions.

The pan-European Stoxx 600 rose 0.33%, with relief building over expectations that the threatened 50% US tariffs might be avoided through negotiations. Germany’s DAX outperformed, climbing 0.83% to a fresh record close of 24,226.49.

Defense stocks such as Hensoldt led sectoral gains, supported by ongoing geopolitical concerns. The EU also moved forward with a €150 billion ($170 billion) arms fund to bolster regional security, even as fighting persisted in Ukraine and rhetoric escalated between Trump and Russian officials.

Bond markets also saw some respite, with yields easing across the US and Europe following a Reuters report that Japan may reduce its supply of long-term government debt—a move that could redirect global fixed-income flows.

Investors will now turn their attention to Wednesday’s OPEC+ meeting and upcoming earnings from Nvidia, which could shape the next leg of global market sentiment.