U.S. stocks rallied on Monday as investors reacted to reports suggesting that upcoming tariffs may be more limited than initially feared. The renewed optimism fueled strong gains across major indices, with the S&P 500 (^GSPC) climbing over 1.7%, the Dow Jones Industrial Average (^DJI) adding nearly 600 points (1.4%), and the Nasdaq Composite (^IXIC) surging almost 2.3%.
Market sentiment improved after President Trump hinted at potential exemptions for several nations, stating that many countries might receive breaks on reciprocal tariffs set to take effect on April 2. The uncertainty surrounding tariffs had been a major factor in recent market volatility, and the latest developments have provided a temporary boost to investor confidence.
Michael Kantrowitz, chief investment strategist at Piper Sandler, emphasized the importance of clarity on trade policies, noting that when the primary source of market stress is alleviated, it often paves the way for a recovery. “Typically, once the biggest concern starts to fade, the market can regain its footing,” Kantrowitz told Yahoo Finance. 
Investors had been bracing for more details on April 2, the so-called “Liberation Day” declared by Trump. However, recent reports indicate that the administration is focusing tariffs on a select group of 15 countries with significant trade imbalances with the U.S., rather than imposing widespread duties.
Treasury Secretary Scott Bessent reinforced this shift in policy, stating in an interview with Fox Business that while only 15% of trading partners would be affected, they represent a substantial portion of U.S. trade.
Despite Monday’s rally, some analysts caution that market volatility may persist until an official tariff announcement is made. Raymond James chief market strategist Matt Orton noted that while the market relief reflects optimism, true stability will only come once the policy details are finalized.
“The slight positive shift we’re seeing is due to a lack of negative surprises from the White House last week and a more focused tariff approach,” Orton said. “But real certainty will only come once we’re past April 2.”
Fundstrat’s head of research, Tom Lee, echoed this sentiment, predicting that easing trade war concerns could spark a significant stock market rebound. “Markets seem poised for a strong rally this week as fears that have weighed on equities in recent months begin to subside,” Lee wrote in a note to clients.
As the countdown to the official tariff policy announcement continues, investors remain watchful, hopeful that the latest signals from Washington indicate a more measured approach to trade regulations.
