U.S. Futures and European Stocks Rebound After Trump Delays Tariff Hike on EU
U.S. stock futures and European equity markets advanced on Monday after former President Donald Trump announced a delay in the planned 50% tariff hike on European Union goods, easing near-term trade tensions.
In a Truth Social post on Sunday, Trump said he would postpone the tariff increase from June 1 to July 9 following a call with European Commission President Ursula von der Leyen, who requested more time to negotiate. The announcement came after markets sold off on Friday when Trump initially revealed the tariff hike—sending the S&P 500 down 0.6% for its biggest daily drop in weeks.
While U.S. financial markets were closed Monday for the Memorial Day holiday, futures pointed to a strong Tuesday open. Dow Jones Industrial Average futures rose 450 points, or 1%, to 42,124. S&P 500 futures climbed 1.2% to 5,888, and Nasdaq-100 futures jumped 1.4% to 21,272.
European markets also bounced back. The Stoxx Europe 600 gained 1%, reversing Friday’s 0.9% drop—its steepest since early April. Germany’s DAX rallied 1.7%, and France’s CAC 40 added 1.1%.
The euro edged up 0.1% to $1.1384, while the 10-year German bund yield rose 3 basis points to 2.602%, as the dollar weakened broadly.
“The EU, taken as a bloc, is the U.S.’s largest trading partner. Rising tensions could trigger a broader risk-off move, pushing the euro, European bonds, and gold higher,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
Analysts warned the tariff dispute could disrupt recent equity gains. “June is likely to be turbulent as the U.S. negotiates trade agreements globally. Volatility could rise if Trump pressures other partners,” said Jochen Stanzl, chief market analyst at CMC Markets.
Trump’s initial “liberation day” tariffs, announced April 2, were paused for 90 days. The EU was facing a 10% tariff until Friday’s escalation to 50%, now temporarily deferred.
Von der Leyen said in a post on X that the conversation with Trump was “good,” but emphasized the need for time to secure a deal by July 9.
Meanwhile, Minneapolis Fed President Neel Kashkari told Bloomberg TV that ongoing trade uncertainty is weighing on business investment. “We’ll have to see what the data says, but meaningful trade announcements could bring the clarity we’re looking for,” he said. Markets currently price in a 58% chance of a Fed rate cut in September, according to the CME FedWatch tool.
European equities have attracted increased attention this year, with the Stoxx Europe 600 up 8.3%, compared to a 1.3% decline for the S&P 500. But Citigroup analysts warned a sustained 50% tariff could knock the European index 7%–8% lower.
Goldman Sachs economists, led by Guillaume Jaisson, project 0% GDP growth for the EU this year, saying that heightened trade tensions would further drag on the region’s already fragile outlook.
“Flows into European stocks have improved but remain light,” Jaisson noted. “Positioning by domestic investors is still cautious despite recent interest.”
