Wall St surges on Trump's EU tariff reprieve

Wall Street has surged as investor risk appetite was buoyed by US President Donald Trump's latest tariff respite and an unexpected jump in consumer confidence.

A broad rally sent all three major US stock indexes higher, with strength in the AI-related "magnificent seven" group of momentum stocks putting the tech-laden Nasdaq out front.

The S&P 500 is now within 3.6 per cent of its record closing high reached on February 19, having plunged as much as 18.9 per cent below that level in the wake of Donald Trump's erratic tariff announcements, which have whipsawed markets for much of the president's second term.

"When (Trump) came out with guns blazing April 2, the market thought the world was ending," said Paul Nolte, senior wealth adviser and market strategist at Murphy and Sylvest in Elmhurst, Illinois.

"The sell-off was so strong and quick that you would expect some rebound, and the rebound has been so sharp and quick that you would expect some type of pullback as investors digest it and ask themselves what the terrain really looks like."

In the latest move, the president backed down from his 50 per cent tariff threat against the European Union, delaying its implementation until July 9 to allow for negotiations between the White House and the 27-nation bloc. The move prompted Brussels to prepare for trade negotiations.

"Investors have kind of figured Trump out a little bit," Nolte added.

"He's like the poker player at the table that you know is making some bets and then when pressed by the other players at the table, he folds."

On the economic front, a 14.4 per cent surge in current-month consumer confidence added momentum to the rally, helping investors look past a steeper-than-expected drop in new orders for core capital goods, considered a barometre of US corporate spending plans.

Richmond Federal Reserve President Thomas Barkin told Bloomberg that economic data has yet to show increased price pressure or joblessness, echoing the sentiments of many Fed officials who anticipate the key interest rate will remain unchanged until the full effect of Trump's tariffs is known.

Minutes from the US Federal Reserve's most recent monetary policy meeting are due on Wednesday.

Long-dated US Treasury yields dipped, while those on the 30-year note were set for their biggest one-day fall since late April, mimicking a steep price rally in longer-term Japanese debt.

The Dow Jones Industrial Average rose 740.58 points, or 1.78 per cent, to 42,343.65, the S&P 500 gained 118.72 points, or 2.05 per cent, to 5,921.54 and the Nasdaq Composite gained 461.96 points, or 2.47 per cent, to 19,199.16.

All 11 major sectors of the S&P 500 advanced on the day, with consumer discretionary and tech shares leading the gainers.

Airlines and megacap tech-related growth stocks were the clear outperformers.

Semiconductors were also ahead of the pack, one day before chipmaker Nvidia is due to report its quarterly results. Year-on-year, the AI darling is expected to post a 43.5 per cent jump in earnings per share, on a 66.2 per cent revenue surge.

Temu-parent PDD Holdings dropped 13.6 per cent after reporting a 47 per cent fall in first-quarter profit and missed quarterly revenue estimates.

Lagging shares were Fair Isaac Corp, down 11.3 per cent, ?VeriSign, Inc, down 3.6 per cent, and ?Autozone Inc, lower by 3.4 per cent.

Advancing issues outnumbered decliners by a 5.42-to-1 ratio on the NYSE. There were 222 new highs and 27 new lows on the NYSE.

On the Nasdaq, 3,206 stocks rose and 1,264 fell as advancing issues outnumbered decliners by a 2.54-to-1 ratio.

The S&P 500 posted 24 new 52-week highs and no new lows while the Nasdaq Composite recorded 87 new highs and 63 new lows.

Volume on US exchanges was 16.98 billion shares, compared with the 17.72 billion average for the full session over the last 20 trading days.