Kevin Hassett, a top White House economist, also offered hope of more trade developments this week.
Investors returned from the Memorial Day long weekend cheering President Donald Trump’s decision to postpone 50 percent tariffs on the European Union.
The blue-chip Dow Jones Industrial Average advanced 400 points, or nearly 1 percent, at the opening bell. The broader S&P 500 Index rose 70 points, or 1.22 percent. The tech-heavy Nasdaq Composite Index jumped 287 points, or 1.5 percent.
While the leading stock market benchmark averages remain in the red this year, they have rebounded by as much as 8 percent over the past month.
In a May 23 post on Truth Social, the president stated that he would impose a 50 percent tariff on the European Union because trade negotiations were “going nowhere.” However, he confirmed on May 25 that he would delay the levy deadline for the 27-member trade bloc to July 9, following a request from European Commission President Ursula von der Leyen.
In Europe, stocks picked up modest gains. Germany’s DAX rose 0.7 percent to a record high on optimism of easing U.S.–EU trade tensions. London’s FTSE also added about 0.7 percent, while France’s CAC 40 Index edged up 0.1 percent.
Traders’ optimism intensified after National Economic Council director Kevin Hassett hinted that “a few more” trade agreements could be announced this week.
“I expect we’ll probably see a few more deals even this week. There’s some stuff very close to the finish. It’s up to the president, of course,” Hassett said in an interview with CNBC’s “Squawk Box” on May 27.
He also suggested that India is “on the list of close to the finish line.”
Bond yields, meanwhile, were mixed to kick off the holiday-shortened trading week.
The yield on the benchmark 10-year slid by 4 basis points, to 4.47 percent. Short-term yields were little changed, while the 20- and 30-year yields dipped below 5 percent.
Long-term interest rates surged in May, with the 20- and 30-year Treasury yields climbing approximately 30 basis points since the start of the month.
Financial markets are facing a series of headwinds, from a tariff-fueled economic slowdown to the potential for the Federal Reserve to pause interest rate cuts this year, says Tom Essaye, the president and co-founder of the Sevens Research Report.
“It’s possible that none of those risks derail the market or the economy, but it is probably more likely that at least one of them causes some sort of problem and last week was about investors being reminded of that reality,” Essaye said in a note emailed to The Epoch Times.
By Andrew Moran
