Stocks Get a Boost From Reprieve on Auto Tariffs: Markets Wrap

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Stocks Get a Boost From Reprieve on Auto Tariffs: Markets Today.

stock :: 2025-04-15 :: source - bloomberg

By John Viljoen and Julien Ponthus

(Bloomberg) -- Stocks rose as US President Donald Trump floated a potential pause in auto tariffs, providing further relief to the market after he suspended levies on some consumer electronics.

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Europe’s Stoxx 600 index advanced 1.2%, buoyed by a rally in auto sector names including Stellantis NV and Continental AG. LVMH tumbled more than 8%, losing its status as Europe’s most valuable luxury firm to Hermes in the process, after its sales disappointed investors. US equity futures edged higher.

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Boeing Co. shares dropped in premarket trading after Bloomberg News reported that China ordered its airlines not to take any further deliveries of the US company’s jets. The move is the latest in the tit-for-tat trade war that’s seen Trump levy tariffs of as high as 145% on Chinese goods.

Ten-year Treasuries extended their recovery from last week’s selloff. A gauge of the dollar was steady after five days of declines.

Markets are showing signs of consolidating as Trump’s tariff exemptions haved raised hopes there may be room for negotiations after the president’s reciprocal levies this month wiped $10 trillion off global equities and spurred a rout in Treasuries. At the same time, the US is pressing forward with plans to impose tariffs on semiconductor and pharmaceutical imports by initiating trade probes led by the Commerce Department.

Even with the Boeing report, “the overall market mood is set on de-escalation,” said David Kruk, head of trading at La Financiere de L’Echiquier. “We got caught out last week with Trump’s reversal of fortunes, and this weekend as well, so we’re waiting before reacting now.”

Yields on 10-year Treasuries jumped 50 basis points last week, the most in over two decades, amid concerns among investors that the tariffs will weaken the US economy. Federal Reserve officials have lowered their outlook for growth and lifted forecasts for inflation.

“While we are seeing carve-outs emerge from Trump’s trade policy, there is unlikely to be any let-up over the coming weeks and months,” said Derek Halpenny at MUFG. “The next dangerous stage for the financial markets will be getting confirmation of the damage being done to the real economy from the tariff hit and the uncertainty.”

US Treasury Secretary Scott Bessent on Monday played down the recent selloff in the bond market, rejecting speculation that foreign nations were dumping their holdings, while flagging that his department has tools to address dislocation if needed. Bessent also dismissed concerns that the simultaneous decline in Treasuries and the dollar last week signified that the US was losing its haven status.

Meanwhile, a Bank of America Corp. survey showed that investor sentiment toward the economy is the most negative in three decades. Even so, fund mangers’ pessimism isn’t yet fully reflected in their asset allocation which could mean more losses for US stocks.

Fund managers are extremely gloomy, with 82% of respondents to BofA’s monthly survey expecting the global economy to weaken. A record number intend to reduce exposure to US equities.

Fund mangers are “max bearish on macro, not quite max bearish on the market,” strategists led by Michael Hartnett wrote in a note. “Peak fear” is not yet reflected in cash allocations, which currently stands at 4.8% of assets and would typically need to rise to 6%, they added.

In Asian trading, Japanese stocks led gains in the region’s equities, with carmakers such as Toyota Motor Corp. and Honda Motor Co. jumping.

In commodities, oil fluctuated, with traders tracking the latest move in the trade war and the prospect of looser restrictions on Iranian crude. Gold rose to trade just below a record high amid sustained demand for havens.

“The environment that we are in right now is an extremely tricky one,” said Christina Woon, portfolio manager at Eastspring Investments. “You’ve got a near daily change in rhetoric out of the US that makes positioning quite difficult.”

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