US markets surged in early trading Monday after President Donald Trump unexpectedly exempted smartphones, computers, and semiconductors from upcoming tariffs, offering a temporary break in the escalating trade tensions with China.

The announcement gave a major boost to tech stocks, setting a bullish tone for global markets to start the week.

By 1:15 PM ET, the Dow Jones Industrial Average was up 135 points to 40,348, the S&P 500 gained 19 points to 5,382, and the Nasdaq rose slightly to 16,741.

Despite the rally, investor sentiment remained cautious. A New York Fed survey showed that 44% of Americans expect unemployment to rise within a year — the most pessimistic view since April 2020. Confidence in the stock market and inflation expectations also worsened.

Commodities slipped as investors weighed the mixed signals.

• Gold fell $20.60 to $3,224/oz

• Oil dropped 0.99% to $60.89/barrel

Bond yields declined as investors sought safety, with the 10-Year US Treasury yield falling 8.8 basis points to 4.405%, its sharpest drop in weeks.

The VIX, Wall Street’s fear gauge, dropped over 10% to 33.76, indicating reduced market volatility.

Global Markets Join the Rally

• Germany’s DAX: +2.5%

• France’s CAC 40: +2.3%

• UK’s FTSE 100: +1.9%

• Japan’s Nikkei 225: +1.2%

• Hong Kong’s Hang Seng: +2.4%

• Shanghai Composite: +0.8%

In South Korea, tech stocks like Samsung and Advantest rallied on hopes that stable supply chains would boost chip demand. China’s March exports rose 12.4% year-over-year, further supporting positive momentum.

Tariff Tensions Not Over

The US exemption followed China’s retaliatory move, imposing tariffs of up to 125% on American goods, in response to US duties that have climbed to 145% on some Chinese products.

While Trump called the move a “temporary reprieve,” he warned that more tariffs are coming, especially targeting semiconductors and pharmaceuticals, citing national security.

Markets took the pause as a chance to rebound. On Friday, Wall Street had already ended strong thanks to upbeat earnings from JPMorgan Chase and Morgan Stanley.

Currency & Oil

• US Dollar slipped slightly

• Yen strengthened to 143.16/USD

• Euro rose to $1.1388

• British Pound hit $1.3184

• WTI Crude: +1% to $62.10

• Brent Crude: +0.9% to $65.36

The Bottom Line

Trump’s surprise exemption helped ease fears of immediate trade disruption, especially for the tech sector. But with new tariffs still on the horizon, markets remain on edge, balancing hope for short-term relief with the risk of a deeper US-China economic clash.