Stocks Surge: Trump Considers Tariff Exemption for Autos as Dow Gains 300 Points

U.S. equities finished higher, recovering from intraday lows during the afternoon following remarks by President Donald Trump proposed another tariff waiver - this time, for the auto industry .

Trump said he's exploring exemptions to his tariffs on imported vehicles and parts to give auto companies more time to establish U.S. manufacturing.

"I'm seeking solutions to assist automobile manufacturers with this transition. These companies are shifting towards components manufactured in countries like Canada and Mexico, but they require some additional time as these will be produced domestically," Trump explained to journalists on Monday during his office visit.

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The Dow Jones Industrial Average finished higher by 0.78%, gaining 312.08 points to close at 40,524.79. The broader S&P 500 index rose by 0.79% or 42.61 points, ending at 5,405.97. Meanwhile, the technology-focused Nasdaq Composite climbed by 0.64%, adding 107.03 points for a final value of 16,831.48. Additionally, the yield on the 10-year U.S. Treasury note decreased slightly to 4.38%.

Over the weekend, Trump carved out an exemption For smartphones, computers, and various gadgets as well as parts such as semiconductors from the extra 125% tariffs He had earlier imposed on all Chinese products.

Apple, which greatly benefited from the exemption, saw its stock rise over 2%, although this was lower compared to approximately 5% higher at the market opening.

Exceptions are viewed positively for the economy and markets; however, experts caution that tariffs remain unclear and might yield unpredictable outcomes, similar to what investors have observed over the last several weeks.

Following their worst week since March 2020, stocks experienced their strongest performance since November 2023," noted Chris Larkin, the managing director for trading and investing at E*TRADE from Morgan Stanley. "For this recovery to sustain itself in the short term, investors might require evidence of ongoing leniency from the White House regarding trade duties. The level of uncertainty remains significant, and daily market fluctuations may stay heightened as a result.

Following the electronic exception declaration, Commerce Secretary Howard Lutnick made his statement. said in an interview On Sunday, the tariffs on the products were still set to be implemented shortly. He also stated, “This is not an indefinite kind of exception.”

Trump stated in a social media message that no exceptions existed. Rather, these items were "subject to the current 20%" tariff. Fentanyl Tariffs , and they are simply transitioning to a different tariff category.

Lutnick mentioned that pharmaceutical goods would face their distinct tariff rate, expected to take effect within months.

Many will undoubtedly view a postponement of 1-2 months as favorable, yet significant doubts remain about whether the administration will actually deliver," stated Mike O'Rourke, chief market strategist at JonesTrading. "Nevertheless, the president has dispatched his most hawkish traders to manage public communication...which could have adverse effects on the markets. Should we see a robust surge driven by individual investors pushing prices up sharply when trading resumes on Monday due to this ‘exemption excitement,’ it might present one final major chance for sellers before the end of the year.

On Monday, former Treasury Secretary Janet Yellen added her voice to the group of economists warning that President Trump’s tariffs could increase the chances of an economic downturn.

"Yellen stated to CNBC in a 'Squawk Box' interview that the likelihood of a recession has significantly increased, pointing out that this will impact household finances and reduce consumer spending," she added that companies might hesitate to invest due to uncertainties, which could amplify the chances of an economic downturn.

Glum Americans

People’s perception of the economy keeps getting worse. A New York Fed consumer survey conducted prior to the tariff announcement on April 2 but released on Monday indicated that Americans believe there is a 44% likelihood of increased unemployment within the next year. This sentiment represents the most pessimistic viewpoint since April 2020, shortly following the onset of the COVID-19 pandemic.

The survey indicated that consumers anticipate short-term inflation to increase and the stock market to decline over the next year.

Corporate news

Apart from tariffs, corporate earnings announcements will kick into high gear. This begins on Friday. major banks started the earnings season with largely favorable quarterly outcomes but cautioned that the economic and tariff landscape remained unpredictable.

Larkin stated that unless there are unexpected developments in policies, earnings might take center stage in the market, particularly with regards to future guidance.

On Monday morning, investment firm Goldman Sachs announced financial outcomes surpassing expectations for the initial quarter, driven by a significant increase in equity trading prior to Trump’s unexpected tariff shifts. This news led to an almost 2% rise in Goldman's stock price.

Further into the week, major companies like Bank of America, Citigroup, Netflix, Johnson & Johnson, and United Airlines are expected to release their quarterly earnings reports.

Individually, Pfizer stopped the development of its potential weight-loss medication, danuglipron, as it may have led to liver damage in one of the participants in a clinical trial. The company’s shares increased by almost 1%.

Cryptocurrency

McDonald’s has decided not to explore incorporating Bitcoin into its finances.

The NCPPR requested that the major fast-food company include Bitcoin in its treasury during their upcoming 2025 annual shareholders' meeting; however, McDonald’s has not indicated whether they will comply with this request. alerted the Securities and Exchange Commission (SEC) It could reject the proposal without fearing any enforcement actions. The SEC consented.

This hasn't affected Bitcoin's price, however. The virtual currency remains aligned with stock market movements, currently up 1.46% at $84,918.64.

This story was updated with new information.

Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at mjlee@The News Pulseand subscribe to our free Daily Money newsletter For insights into personal finances and daily business updates from Monday to Friday.

The article initially appeared on USA TODAY: Shares finish higher. Trump considers exempting auto imports from tariffs. The Dow gains 300 points.