(Reuters) – U.S. stock index futures jumped on Tuesday after President Donald Trump rolled back his threat of steep tariffs against the EU and tensions between the United States and the European bloc cooled as traders returned after the Memorial Day break.
On Sunday, Trump backed off from his threat to impose 50% tariffs on EU imports next month, restoring a July 9 deadline to allow for talks between Washington and the 27-nation bloc to produce a deal.
He had said on Friday that he was recommending a 50% tariff effective June 1, expressing frustration that trade negotiations with the EU were not moving quickly enough.
“However, we’re still in the dark as to whether talks will lead anywhere, despite EU preference of a deal over escalation,” Rabobank analysts said in a note.
Asian and European markets were mixed after rising on Monday, although moves in U.S. assets were more pronounced as traders returned after the long weekend.
At 04:33 a.m. ET, Dow E-minis were up 526 points, or 1.26%, S&P 500 E-minis were up 85.75 points, or 1.47%, and Nasdaq 100 E-minis were up 346.25 points, or 1.65%.
Most megacap and growth stocks jumped in premarket trading. Apple was up 1.9%, Alphabet rose 2.3% and Tesla climbed 2.5%.
Trump Media & Technology Group advanced 10.3% after a media report said Trump’s social media firm planned to raise about $3 billion to spend on cryptocurrencies such as bitcoin.
Shares of semiconductor industry bellwether Nvidia kicked off the week with a 2.8% gain. The company is slated to report quarterly earnings after markets close on Wednesday.
In economic data, the May consumer confidence report is due shortly after markets open on Tuesday, while minutes from the U.S. Federal Reserve’s last policy meeting are scheduled to be released on Wednesday.
A number of Fed officials are expected to make public remarks through the week. Minneapolis Fed President Neel Kashkari on Tuesday called for holding interest rates steady until there is clarity on how higher tariffs impact inflation.
Personal Consumption Expenditure data, the Fed’s favored indicator for inflation, for May and a second estimate of first-quarter GDP are also scheduled for later this week.
Wall Street witnessed sharp weekly losses on Friday as worries about mounting U.S. debt and Trump’s latest shakeup of trade policy sparked a broad selloff.
Credit rating agency Moody’s cutting the U.S. credit rating and Trump’s sweeping tax bill – that is expected to substantially expand federal debt – passing a House vote added to the concerns.
The S&P 500 is about 6% from record highs, although it has rebounded sharply from April lows as easing trade concerns and tame inflation data spurred a risk-on rally.
On the downside, shares of gold miners including Newmont fell about 2% as gold prices slipped more than 1%.
(Reporting by Shashwat Chauhan in Bengaluru; Editing by Pooja Desai)
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