US shares rise as tariffs on smartphones, computers exempted; dollar dips

US shares gained on Monday, while the dollar dipped, after the White House exempted smartphones and computers from US tariffs but President Donald Trump said semiconductor levies were likely.

The Dow Jones Industrial Average and the S&P 500 both gained about 0.8 per cent. The Nasdaq Composite added about 0.6 per cent, boosted by technology shares including Apple, whose stock gained around 2 per cent. The S&P 500 rallied 5.7 per cent last week, but is still down around 8 per cent in 2025.

On the face of it, the exemption of 20 product types accounting for 23 per cent of US imports from China was a boon to manufacturers. But the technology tariff news gave only a modicum of help to US government bonds trying to recover from the bruising they suffered last week, and the dollar lost ground once more as the off-again, on-again trade policy gyrations left investors confused and analysts bearish on the long run.

 

The 90-day pause on broad tariffs and further concessions over the weekend "lessen the near-term probability of a recession," Morgan Stanley US equity strategists wrote in a note on Monday. Still, they noted that the back-and-forth on policy is still likely to exacerbate uncertainty for businesses and consumers.

"The equity market will likely remain in a wide trading range with high volatility until we have more certainty on the depth of the growth slowdown and the timing of a recovery," they wrote.

The relative optimism was felt in Europe and Asia as well, outperforming also because they missed the tail end of the bounce on Wall Street on Friday.

Europe's broad STOXX 600 index rose about 2.7 per cent, having lost 2 per cent last week, and MSCI's broadest index of Asia-Pacific shares outside Japan gained 1.6 per cent after shedding more than 4 per cent last week. [.EU] MSCI's gauge of stocks across the globe rose 1.25 per cent.

Tech firms and the broader supply chain were the biggest gainers in Europe, after companies in Apple's supply chain surged in Asia.

The market also has more earnings to weather this week. Goldman Sachs on Monday said profit rose 15 per cent in the first quarter, fueled by stock traders who capitalized on volatile markets, sending its shares up about 2 per cent. Bank of America, Citigroup and chipmaker TSMC are due to report later in the week.

In terms of economic data, March numbers showed a 12.4 per cent jump in Chinese exports as firms rushed in orders ahead of Trump's tariffs.

On the docket this week are US retail sales and Chinese gross domestic product, while Federal Reserve Chair Jerome Powell speaks on the economic outlook on Wednesday, when he will almost certainly be quizzed on the prospect of rate cuts and the recent stress in the Treasury market.

Not so safe

Fear the US Treasury market would lose its global preeminence abated slightly, with the 10-year yield falling after last week's epic surge. The 10-year yield was last down about 11 basis points at 4.382 per cent.

Last week's rise in yields came alongside a fall in the dollar. The slide continued on Monday, with the dollar index down 0.2 per cent

The recent declines can be explained by overseas investors flooding out of US assets to move back home, though some are asking broader questions.

"Any sustained environment of a lower US dollar, lower bond prices, and lower equity prices suggests to us capital outflow from US assets," Wells Fargo Investment Institute strategists wrote in a note on Monday. "We believe it reflects evaporating US growth exceptionalism and reduced attraction at the margin for dollar assets for reserve purposes amid erratic US decision-making."

Japanese officials are gearing up for trade negotiations with the United States that will likely touch on currency policy, with some officials privately bracing for Washington to call on Tokyo to prop up the yen. On Monday, the dollar fell against the yen again, down 0.26 per cent to 143.13, after hitting a six-month low at 142.05 last week.

The euro was little changed at $1.148, still near a three-year top of $1.1474 hit last week. The European Central Bank meets on Thursday and is considered certain to cut rates by a quarter point to 2.25 per cent.

In commodity markets, spot gold fell about 0.75 per cent to $3,212, although global uncertainty has proven a windfall to gold prices which surged to all-time peaks at $3,245 an ounce. [GOL/]

Oil prices settled slightly higher on Monday on the electronic tariff exemptions and data showing a sharp rebound in China's crude imports in March. But gains were limited by concerns that the trade war could weaken global economic growth and dent fuel demand. [O/R]