Wall Street Pulls Back After Early Gains As Tariff Uncertainties Persist: What's Driving Markets Monday?

Wall Street pared early morning gains by midday Monday, as investor caution returned despite a temporary easing in U.S.-China trade tensions. While the initial market reaction was positive, especially in tech, enthusiasm faded as the trading session progressed.

Over the weekend, the White House announced a provisional exemption for smartphones and semiconductors from China’s proposed 145% trade tariff. These items will instead face a 20% levy—linked to fentanyl-related enforcement—until sector-specific duties are finalized.

The development triggered a strong premarket rally in technology stocks. Yet, those gains were sharply trimmed by midday amid broader geopolitical and policy concerns.

During a White House meeting with El Salvador President Nayib Bukele, President Donald Trump said he plans to impose tariffs on pharmaceutical imports to boost domestic manufacturing.

He reiterated a hardline stance on Iran, warning of severe consequences if Tehran develops nuclear weapons, but also suggested “flexibility” in tariff negotiations, emphasizing a desire not to harm U.S. businesses.

Defensive and domestic-oriented sectors such as real estate, utilities, and consumer staples outperformed broader markets. In contrast, consumer discretionary was the only sector trading in negative territory.

Treasury yields dropped significantly, reflecting increased demand for U.S. government debt and easing fears of foreign liquidation. The 2-year yield fell 10 basis points to 3.87%, while 10-year benchmark yield dropped 7 basis points to 4.42%.

Gold pulled back 1% to $3,200 per ounce, pausing after a three-session rally. Crude oil fell 0.8% to $61 per barrel, while natural gas slid 2.9% to $3.39 per MMBtu, eyeing its lowest level since last Wednesday.

Bitcoin BTC/USD was little changed at $84,000, while Ethereum ETH/USD gained 2.1% to $1,630.

Monday’s Performance In Major US Indices, ETFs

According to Benzinga Pro data:

• The SPDR S&P 500 ETF Trust SPY inched 0.5% up to $537.23.
• The SPDR Dow Jones Industrial Average DIA rose 0.4% to $403.81.
• The tech-heavy Invesco QQQ Trust Series QQQ edged 0.4% higher to $454.38.
• The iShares Russell 2000 ETF IWM inched 0.1% higher to 184.74.
• The Real Estate Select Sector SPDR Fund XLRE outperformed, up 1.9%; the Consumer Discretionary Select Sector SPDR Fund XLY lagged, down 0.5%.

In company news, Goldman Sachs Group Inc. GS reported stronger-than-expected earnings during the first quarter, and shares rose 1.9%.

S&P 500’s Top 5 Gainers On Monday

S&P 500’s Worst 5 Losers On Monday

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