Closing Recap 

A wave of optimism propelled U.S. equities sharply higher, as President Trump’s decision to delay threatened tariffs on the EU fueled a broad risk-on rally; the dollar strengthened significantly and Treasury yields fell amid a global bond buying spree, while gold and oil prices retreated. 

Key Takeaways 

• EU Tariff Reprieve Ignites Rally: Stocks surged (S&P +2.05%, Nasdaq +2.47%) after President Trump postponed the planned 50% tariffs on EU goods until July 9th, signaling a de-escalation in trade tensions. 
• Widespread Market Gains: The rally was broad-based, lifting most sectors as investors embraced the improved trade outlook. 
• Consumer Confidence Soars: A much stronger-than-anticipated May Consumer Confidence reading provided an additional tailwind, suggesting underlying resilience in the U.S. consumer. 
• Dollar Rebounds, Yields Tumble: The U.S. dollar staged a strong recovery from recent lows, while Treasury yields declined significantly as investors bought bonds. 
• Safe Havens Suffer: Gold prices fell sharply for a second day as risk appetite returned, and oil prices also slipped on supply considerations. Bitcoin, however, continued its ascent. 
• Focus Shifts to Data & Fed: With immediate EU tariff concerns eased, market attention now turns to upcoming economic data (Fed minutes, PCE inflation, GDP) and the ongoing tax bill negotiations. 

Market Overview

Wall Street celebrated a significant de-escalation in trade tensions today, with U.S. equities staging a vigorous ascent as investors returned from the long holiday weekend. The market narrative was overwhelmingly positive, driven by President Trump’s announcement that he would delay the imposition of threatened 50% tariffs on European Union goods until July 9th. This crucial decision, following a weekend phone call with European Commission President Ursula von der Leyen, injected a strong dose of relief into markets that had been battered by fears of a widening trade war. Trump noted on Truth Social that the EU had initiated contact to schedule further talks. 

Index	Up/Down	% Change	Last
DJ Industrials	1016.57	0.0266	42343
S&P 500	118.72	0.0205	5921
Nasdaq	461.96	0.0247	19199
Russell 2000	50.55	0.0248	2090

The news acted as a powerful catalyst, unleashing pent-up buying demand across the board. The S&P 500 and Nasdaq Composite both posted impressive gains, shaking off the gloom that had pervaded markets on Friday. Adding further fuel to the bullish sentiment was a surprisingly robust May Consumer Confidence report, which far exceeded expectations and indicated an easing in near-term inflation concerns among consumers. This combination of improved trade optics and strong consumer sentiment led to a classic risk-on session. Investors aggressively moved out of safe-haven assets, evidenced by the sharp declines in gold and the rally in U.S. Treasury bonds (which sent yields lower).

The U.S. dollar also found renewed strength. While the immediate threat of EU tariffs has receded, the market now looks ahead to further domestic policy developments, including ongoing tax bill negotiations, and key economic releases later in the week.

Economic Data

While trade news dominated, yesterday’s economic docket featured a blowout Consumer Confidence number and mixed signals from Durable Goods orders: 

• Consumer Confidence (May): Soared to 98.0, crushing the 87.0 consensus and well above the prior 85.7. The report also indicated that 12-month inflation expectations eased to 6.5% from 7.0% in April. 
• Durable Goods Orders (Apr): Headline orders fell -6.3% m/m (better than the -7.8% consensus, vs. +7.6% prior). Excluding transportation, orders rose +0.2% (beating -0.1% est.). However, nondefense capital goods orders ex-aircraft (a proxy for business investment) declined -1.3% (missing -0.1% est.).
•  S&P Case-Shiller Home Prices (Mar): Showed slowing annual growth, with 20-metro area prices up +4.1% y/y (below +4.5% consensus). Seasonally adjusted prices fell -0.1% m/m. 
• Atlanta Fed GDPNow (Q2 Forecast): Revised lower to 2.2% from 2.4%, with the nowcast for Q2 real gross private domestic investment growth decreasing. 

Commodities, Currencies, and Treasuries 

Gold prices extended their decline for a second session, with June futures falling $65.40 (-1.94%) to settle at $3,300.40 per ounce. The sharp drop was a direct consequence of significantly improved risk sentiment following the U.S.-EU tariff postponement, which diminished the appeal of safe-haven assets. A strengthening U.S. dollar also weighed on bullion. Crude oil prices also slipped, with WTI down $0.64 (-1.04%) to $60.89/bbl. Concerns about a potential supply glut, stemming from progress in U.S.-Iran talks and expectations that OPEC+ might increase output, overshadowed the positive broader market mood. Natural gas prices, however, posted gains.

Asset	Up/Down	Unit / % Change	Last
WTI Crude	-0.64	USD/bbl	60.89
Brent	-0.65	USD/bbl	64.09
Gold	-65.4	USD/oz	3300.4
EUR/USD	-0.0049	USD	1.1338
USD/JPY	1.41	JPY	144.25
10-Year Note	-0.079	%	0.04432

The U.S. dollar index rallied, recovering from its lowest levels of the year seen on Friday, gaining against both the Euro and the Yen as the trade picture brightened. Treasury prices surged (yields fell significantly), with the 10-year yield dropping nearly 8 basis points to 4.432%. This rally in bonds, despite the risk-on equity move, might reflect an unwinding of recent extreme yield spikes or lingering global growth concerns. A 2-year Treasury note auction saw solid demand. Bitcoin continued its impressive rally, surging above $110,000.

Looking Ahead 

The market will now shift its focus to the durability of this trade optimism and await further details on negotiations. Key upcoming events include the release of the minutes from the Federal Reserve’s last policy meeting on Wednesday, Q1 GDP data on Thursday, and the crucial PCE inflation report for April on Friday. These releases will be vital in shaping expectations for future Fed policy. Q1 earnings season is largely complete, but reports from remaining companies, including tech giant Nvidia (NVDA), will still be closely watched. The progress of the proposed tax bill through the Senate will also be a key area of interest.