Market Rallies as Fed's Tariff Rate Cut Statement Turns Heads

The market started strongly on Monday morning following news that tariffs on various electronic devices and semiconductors were being delayed. A strong open on Monday is generally an invitation to reduce exposure, especially when the market is as volatile as this one.

The indices were nearly back to flat when Fed Governor Christopher Waller stated that the inflationary impact of tariffs was likely to be temporary and interest rate cuts were "very much" on the table. In addition, President Trump indicated that he was inclined to provide some tariff relief for struggling automobile manufacturers.

The market rallied back up on the news. It also didn’t hurt that Treasury Secretary Bessent indicated that trade negotiations are ongoing with the U.K., Australia, South Korea, Japan and others. If deals are made with these countries, it will provide a blueprint for dealing with 50 more countries. China is going to be much more difficult, but if progress is made with the EU and others, then some tariff worries will dissipate.

Technically, the indices moved back up to the highs that they hit on a record-breaking day last Wednesday when the 90-day delay of tariffs was announced. The close was a little weak, but breadth was very strong at around four-to-one positive, and the S&P 500 added about 1%. The Magnificent Seven MAGS ended flat despite a strong move in Apple AAPL, and small caps IWM were the leaders with a jump of 1.3%.

Overall, the market is in pretty good shape and appears to be anticipating some positive news on tariff deals. The immediate concerns have subsided, and now it is up to the Trump team to deliver something positive.

Have a good evening. I’ll see you tomorrow.

At the time of publication, DePorre had no positions in any securities mentioned.