The postponement of the introduction of new tariffs caused a violent rally in the American market

Today’s trading session in the United States was characterized by a robust upswing, with minimal selling pressure. The stock market benefited from several positive factors: it began on a strong note and continued to climb as the day progressed. This upward momentum was fueled by investors who had previously stayed on the sidelines, eager to avoid missing out on further gains. The major indices closed near their session highs.

Three significant events drove the market’s growth:

1. President Trump announced the postponement of a 50% tariff on EU goods until July 9, granting more time for trade negotiations. This decision followed a phone call with European Commission President Ursula von der Leyen, who reportedly accelerated the talks.

2. U.S. Treasury bond yields decreased as Japan considered reducing the issuance of ultra-long-term bonds. The yield on 10-year Treasuries fell by 8 basis points to 4.43%, dropping below the psychologically crucial 4.50% level. The 30-year bond yield also declined by 10 basis points to 4.94%, breaching the 5.00% threshold.

3. The consumer confidence index rose sharply to 98.0 points in May, surpassing the Briefing.com forecast of 87.0. This increase came after a downward revision of April’s data to 85.7. Additionally, the average inflation expectations for the next 12 months dipped from 7.0% to 6.5%.

The sectors that contributed most to the market rally were consumer durable goods (+3.0%), information technology (+2.6%), and communication services (+2.1%). All 11 sectors in the S&P 500 finished the day in the green, but these three sectors outperformed the index. The utilities and energy sectors had the lowest growth rates, each increasing by 0.8%.

As tariff tensions eased, the demand for defensive strategies diminished. The CBOE VIX volatility index declined by 13.6% to 19.25, indicating a decrease in market anxiety.

The breadth of the market also supported the bullish trend: on the New York Stock Exchange, rising securities outnumbered falling ones by more than six to one, and on the Nasdaq, the ratio was more than two to one.

Our American FTinvest 11 portfolio continued to rise gaining 0.61% for the day and closing at 747.69.