US and Japanese stocks surge as gold and dollar plunge after Trump agrees to postpone Europe tariffs

Stocks in both the United States and Japan climbed hard on Monday after President Donald Trump said he would delay the 50% tariffs he previously threatened on goods from the European Union.

He made the announcement late Sunday, pushing the original June 1 deadline to July 9. Data from Bloomberg shows that this delay instantly lifted US equity-index futures, reversing some of the damage done Friday when Trump had first dropped the threat.

S&P 500 futures jumped 0.9% and Nasdaq 100 futures went up about 1% after the announcement. That bounce followed a rough close to last week when those same contracts dropped sharply in response to Trump’s tariff warning.

Before the extension, futures for Japan, Australia, and Hong Kong had already been trading lower in early Asia sessions, echoing the Friday mood on Wall Street.

Trump threats drag gold down, lift the dollar

Trump’s Friday move wasn’t just about the EU. He also said he’d slap a 25% tariff on smartphones if companies like Apple Inc. and Samsung Electronics Co. didn’t start producing inside the US. That aggressive talk didn’t go unnoticed.

The dollar, which had just sunk to its lowest point since December 2023, climbed early Monday. At the same time, the yen and Swiss franc, which had surged on Friday’s uncertainty, both retreated.

Gold didn’t hold up either. The metal had gained 1.9% on Friday from traders looking for safety, touching $3,357 per ounce, but by Monday, spot gold was down 0.3% at $3,346.89/oz. Analysts said that even though the delay lowered short-term panic, concerns are still high over the US fiscal position.

Those fears got worse after Moody’s Ratings took away the US’s top-tier credit grade this month, citing Trump’s latest tax bill that passed the House of Representatives last week and is now with the Senate.

Meanwhile, the Treasury market showed little movement Friday. Yields had shot up earlier in the week as traders tried to figure out how much damage Trump’s new tax breaks might do to the national debt. Treasuries were closed Monday for a US holiday, giving investors a brief pause ahead of more data.

The next big report comes Friday when the Federal Reserve releases its preferred inflation metric, the Personal Consumption Expenditures Price Index (excluding food and energy). Economists are looking for a 0.1% rise for April.

US Steel deal, Japan negotiations, and shipping worries

Friday also brought a curveball: Trump announced a deal between United States Steel Corp. and Japan’s Nippon Steel Corp.. The move stunned traders. Trump said the agreement would help keep US Steel in America, but gave no further details. Still, it was enough to send US Steel shares up 21.2%. Meanwhile, Nippon Steel’s ADRs rose 1.7%.

Japanese stocks may stay volatile. After Trump’s comments, the yen weakened, which tends to support local exporters. But anxiety over Europe and Apple’s exposure remains. Shoji Hirakawa, chief global strategist at Tokai Tokyo Intelligence Lab, said Monday, “Japanese stocks are likely to start lower today due to concerns over tariffs on Europe and Apple, but the decline is expected to gradually narrow.”

The Nikkei 225 futures touched 37,210 on the Chicago Mercantile Exchange, slightly higher than the last close of 37,160.47. Behind the scenes, Japan’s top trade officials are trying to close out negotiations before Trump sits down with Prime Minister Shigeru Ishiba in June.

Hirakawa also said, “Given that tariffs negotiations between Japan and the US are ongoing, it’s clear that compared to two months ago, the situation is moving toward a resolution. Stocks could turn positive.”

Capital Economics thinks Trump might be bluffing. “At this stage, we are not inclined to change our working assumption that tariffs on the EU will ultimately settle around 10%, but this underlines that there are risks and that the road to an agreement could be rocky.”

Back in Europe, there are signs that the ongoing trade drama is already starting to jam up major shipping ports. Some northern European hubs are facing rising congestion, which could push global shipping costs higher if the tariff threats continue into the summer.

On the data front, Asia is set to release several numbers this week: Singapore’s industrial production, Hong Kong’s trade figures, and South Korea’s retail sales—all expected between now and Saturday. Traders are watching those closely as they gauge how the region is holding up under the weight of ongoing US policy moves.