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Dow rallies 500 points to start week on hopes Trump is softening tariff stance

Economy & Finance 0

Stocks jumped Monday on reports that President Donald Trump may hold back from implementing some of his wide-ranging tariff plans, raising hopes the U.S. will avoid plunging the world into an all-out trade war.

The Dow Jones Industrial Average jumped about 560 points, or 1.3%. The S&P 500 added 1.6%, while the tech-heavy Nasdaq Composite gained roughly 2%.

Shares of Tesla, which have fallen nine straight weeks, were up more than 9%, adding to its Friday gains. Meta and Nvidia each climbed about 3%.

Investors remain jittery over a potential slowdown in U.S. economic growth, as Trump’s April 2 start date for reciprocal tariffs approaches.

Trump Tariffs To Target 'Dirty 15'

In another possible good sign, the Trump administration has indicated that reciprocal tariffs won't be universal in scope. Treasury Secretary Scott Bessent said last week that reciprocal tariffs will target what he called the "dirty 15," meaning the 15% of trading partners with which the U.S. runs a big trade deficit.

That makes sense, because it's hard to make a case for applying reciprocal tariffs to countries with which the U.S. has balanced trade or even runs a surplus.

The German Marshall Fund think tank highlighted a dozen trading partners whose goods trade surplus with the U.S. in 2024 makes them likely members of the "dirty 15." They include China ($295 billion surplus), the European Union ($236 billion), Mexico ($172 billion), Vietnam ($123.5 billion), Taiwan ($74 billion), Japan ($68.5 billion), South Korea ($66 billion), Canada ($63 billion), India ($46 billion), Thailand ($46 billion), Switzerland ($38.5 billion) and Malaysia ($25 billion).

While the narrowing of the targets of reciprocal Trump tariffs suggests moderation, those 12 trading partners accounted for nearly $2.8 trillion in U.S. goods imports last year, or more than 80% of the total.