Key Takeaways
- The S&P 500 jumped 1.8% on Monday, March 24, as investors reacted to reports that imminent reciprocal tariffs could exclude levies on key sectors.
- Tesla shares posted the top performance in the benchmark index, extending recent gains as the carmaker said it would launch its driver-assistance features in China.
- The improving tariff outlook boosted semiconductor stocks, with AMD shares outperforming after reports that its chips could be used in AI solutions from China’s Ant Group.
Major U.S. equities indexes popped higher following reports that President Donald Trump could limit the scope of the reciprocal tariffs set to take effect on April 2.
Monday’s upbeat market session marked the beginning of a new trading week. Several important economic data points, including updates on consumer sentiment, the housing market, and inflation, are expected to be released.
The S&P 500 gained 1.8%, while the Dow added 1.4%. A resurgence among tech stocks helped lift the Nasdaq, which closed 2.3% higher.
Tesla (TSLA) shares surged 11.9%, logging the S&P 500’s top daily performance. The march higher on Monday extended gains posted late last week after Tesla CEO Elon Musk held an all-hands meeting with employees, arguing that investors have underestimated the potential of the firm’s self-driving and humanoid robot technology. Tesla also announced it would activate its smart driving-assistance feature in China as soon as it receives regulatory approval.
United Airlines (UAL) increased annual fees for its rewards credit cards and airport lounge memberships. While customers will have to pay more for these travel perks, United also announced sign-up bonuses for new co-branded credit cards with JPMorgan Chase, along with additional benefits for cardholders, such as credits for ridesharing services. The carrier stressed that the enhanced benefits should outweigh the cost increase, and United Airlines shares soared 7.2%.
Semiconductor stocks got a boost from the developments on trade policy, with suggestions that chips could receive a reprieve in the upcoming round of reciprocal tariffs. Advanced Micro Devices (AMD) gained 7.0% after China’s Ant Group said it had developed a more cost-efficient technique for training artificial intelligence (AI) models. Although Ant has used AI chips from Nvidia (NVDA) in the development process, it is reportedly considering alternatives from AMD and Chinese rivals.
While the alleviation of tariff concerns helped lift high-risk, high-reward investments like tech stocks, shares of companies known for their more defensive characteristics came under pressure. Shares of Hormel Foods (HRL), the parent company of Spam and other packaged food brands, fell 2.4%, losing the most of any S&P 500 stock. Hormel announced last week that former CEO Jeff Ettinger would rejoin its board of directors and participate in the committee tasked with naming a replacement for current CEO Jim Snee, who is set to retire later this year.
Shares of MarketAxess Holdings (MKTX), operator of a digital trading platform for fixed-income securities, moved 2.4% lower. Monday’s downturn reversed some of the gains posted by the stock this month after MarketAxess reported robust growth in average daily volume for February. While strength in emerging markets and Eurobonds contributed to the positive monthly trading figures, the platform experienced softness in U.S. credit markets.
Brown-Forman (BF.B) stock also slipped 2.3%. Shares of the alcoholic beverage maker have been trending downward over the past two weeks as tensions between the U.S. and major trade partners shine a spotlight on whiskey and other spirits. However, recent reports that the European Union might delay its impending tariff on U.S. whiskey could spell some relief for the Jack Daniels parent.
