Global Markets Surge as Trump Dismisses Tariff Policy Shift Report

Global stocks rallied on Monday, fueled by a mix of market optimism and political developments. The U.S. dollar index took a hit, while European equities and currencies saw notable gains. The movements came after President-elect Donald Trump dismissed a report suggesting his administration might pursue a more moderate tariff policy than his campaign had promised.

The Washington Post had earlier reported that Trump’s team was exploring sector-specific tariffs focused on industries critical to national security, a departure from his campaign’s sweeping tariff proposals. However, Trump quickly dismissed the report as “Fake News” on social media, adding to market speculation.

Tom Plumb, CEO of Plumb Funds, noted the recurring pattern of “trial balloons” being floated, allowing Trump to adjust public messaging as needed. Wall Street responded positively, with major indexes showing significant gains. Technology, materials, communication services, and consumer discretionary stocks led the way:

• Dow Jones Industrial Average: Up 0.88% to 43,108.79
• S&P 500: Gained 1.30% to 6,019.72
• Nasdaq Composite: Surged 1.82% to 19,979.44

European stocks also rallied, with the pan-European STOXX 600 rising 0.94% to close at 512.37. MSCI’s global stock index climbed 1.20%, reflecting broad-based market confidence.

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The U.S. dollar index dropped 0.73% to 108.17, as the euro strengthened 0.88% to $1.0399. The Canadian dollar also gained, rising 0.48% to 1.44 per U.S. dollar following Canadian Prime Minister Justin Trudeau’s resignation.

In the bond market, long-term Treasury yields increased, with the 10-year note yield rising 2.7 basis points to 4.622%, and the 30-year bond yield up 2.6 basis points to 4.8409%. However, the 2-year note yield, which reflects expectations for Federal Reserve interest rate changes, dipped slightly.

Oil prices reached a 12-week high, driven by a winter storm boosting energy demand in the U.S. Brent crude edged up 0.16% to $76.62 per barrel, while WTI crude gained 0.18% to $74.07. Both benchmarks are on a six-day winning streak, their longest since October.

Meanwhile, gold prices remained steady as rising Treasury yields balanced out the weaker dollar. Spot gold held at $2,639.46 an ounce, while U.S. gold futures slipped 0.27% to $2,637.90.