Dow Jones and S&P500: Monday Rally Eases as US Stocks Weigh Tariff Uncertainty

Markets Rally on Targeted Tariff Reports, But Uncertainty Persists

U.S. equities surged Monday, with the Dow Jones Industrial Average climbing nearly 600 points (+1.4%) and technology stocks leading the charge.

Tesla jumped 12% to headline the rally, which followed reports that President Trump’s proposed April 2 tariff package would take a more targeted approach than previously feared. Instead of sweeping, sector-wide duties, the administration is reportedly focusing on 10–15 nations—dubbed the “dirty 15”—that represent the bulk of the U.S. trade deficit.

Mixed Messaging Undermines Investor Confidence

Despite Monday’s optimism, the underlying tone remains one of deep uncertainty. President Trump suggested he “may give countries breaks” on tariffs, yet in the same breath introduced new levies on automobiles, lumber, and semiconductors. This erratic policy communication has made strategic positioning difficult. BNY strategist Bob Savage described the environment as “peak uncertainty,” warning that traders face significant headline risk with every new statement from the administration.

That unease was echoed across global markets. The MSCI Asia-Pacific Index declined by 0.35% Tuesday, reflecting risk-off sentiment in the region. Meanwhile, European equity futures opened lower, as international investors remain cautious about the broader fallout from escalating trade tensions.

U.S. Trade Leverage May Be Overestimated

Analysts are increasingly questioning the assumptions behind the administration’s tariff strategy. The U.S. share of global imports has declined from 19.6% in 2000 to just 13.5% today, reducing America’s ability to exert economic pressure through trade. A report from IMD Business School estimates that over 70 countries could reorient their export flows within 12 months if cut off from the U.S. market, limiting the intended impact of U.S. tariff threats.

In addition, while the administration claims U.S. tariff rates are abnormally low, many experts argue that the trade-weighted difference with major partners is modest. The risk of retaliatory tariffs remains high, especially from nations directly targeted by the “dirty 15” strategy.

Upcoming Economic Data to Steer Near-Term Sentiment

Beyond trade, key U.S. economic indicators this week could influence short-term market direction. The Consumer Confidence Index—set for release later today—is expected to post a fourth consecutive monthly decline, reflecting broader economic anxiety. Traders are also watching Thursday’s durable goods orders and Friday’spersonal spending data for confirmation of consumer and industrial resilience.

Market Outlook

Expect continued volatility through early April as traders await concrete tariff details. Monday’s rebound suggests markets are starting to price in a less severe outcome, but the prior four-week S&P 500 selloff underscores underlying fragility.

Sector rotation is likely to intensify, with stocks in autos, semiconductors, and lumber especially exposed. Defensive plays and opportunistic positioning may offer upside for disciplined traders, while aggressive strategies will require nimble execution as sentiment shifts rapidly approaching April 2.

More Information in our Economic Calendar.