The Dow Jones Industrial Average surged nearly 600 points on Monday as investors grew optimistic that President Donald Trump may soften his stance on tariffs. The rally followed reports suggesting the administration could take a more targeted approach, potentially delaying or exempting certain sectors and countries from the planned reciprocal tariffs. At the close of Monday’s session, the Dow jumped 597.97 points, or 1.42%, to settle at 42,583.32.
The S&P 500 climbed 1.76% to 5,767.57, while the tech-heavy Nasdaq Composite gained 2.27%, closing at 18,188.59. Trump had previously proclaimed April 2 as “Liberation Day,” vowing to introduce massive tariffs matching foreign countries’ import taxes dollar-for-dollar. However, following a Cabinet meeting on Monday, the president hinted at potential exemptions and delays for some sectors and countries.
“Market conditions are improving dramatically as the anxiety around reciprocal tariffs is somewhat diminishing,” said Charlie Ripley, senior investment strategist at Allianz Investment Management.
Dow rises with tariff optimism
“From a risk standpoint, escalation or retaliation has always been a concern, but should the administration come through with a more targeted and tactical strategy, the risks of a full-blown trade war are reduced.”
Consumer discretionary stocks, which have been the worst-performing sector of 2025, led the S&P 500 on Monday, marking their best day since November 2023.
The Consumer Discretionary Select Sector SPDR Fund (XLY) gained 3.7%. Electric vehicle stocks were the biggest gainers in the sector, each climbing roughly 4%. In other market news, Oklo shares rose more than 13% after the company announced that the Nuclear Regulatory Commission will begin assessing its license application for an advanced microreactor project.
Pinterest shares jumped 4.5% following an upgrade from Guggenheim, while Palantir Technologies tracked another session of significant gains, rising more than 5%. The Treasury Department also extended Chevron’s license to pump oil in Venezuela until May 27, following President Trump’s decision to reverse a Biden administration policy. Despite the day’s gains, uncertainty surrounding the administration’s trade policy remains.
Ongoing negotiations with trading partners and the potential for further announcements continue to present challenges for investors, businesses, and consumers navigating the ever-changing landscape.
