Markets stabilized Tuesday, as investors assessed President Trump's latest trade salvoes, including his move to extend the pause on so-called reciprocal tariffs by three weeks.
On Monday, the president notified 14 nations, mostly in Asia, of looming rates largely in line with his April "Liberation Day" blitz, and signaled some wiggle room for striking deals. He extended the grace period on sweeping levies to Aug. 1, from July 9.
"Tentative relief is prevailing as Trump's initial decisions are sinking in," Commerzbank Research's Christoph Rieger said.
Stock futures were muted early Tuesday, after a modest selloff in U.S. stocks Monday. The Cboe Volatility Index, known as the VIX, dropped, while Treasury bond prices fell and the dollar slipped.
Trump is expected to contact more countries Tuesday onward this week with proposed unilateral tariff rates.
Nations including South Korea and Japan got letters yesterday. Both face 25% rates, despite Tokyo's extensive negotiations with Washington.
Japan's top trade negotiator said talks had progressed Tuesday, after speaking with Commerce Secretary Howard Lutnick. Prime Minister Shigeru Ishiba said he would strike a deal to protect Japan's national interests, but warned of potential job losses.
Notable absences from the trading partners notified Monday included the European Union and Taiwan. That spurred speculation among analysts as to whether the two could be among the next letter recipients, or those scoring preliminary deals.
In recent trading:
--S&P 500 and Nasdaq-100 futures edged higher. Contracts tied to the Dow industrials were little changed.
--The euro gained against the dollar, as hopes rose for a soon-to-come EU-U.S. trade deal.
--Treasury yields edged up. Ten-year yields topped 4.4%, having settled Monday at 4.39%.
--Japanese assets were muted, while Korea's currency and stocks gained.
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(END) Dow Jones Newswires
July 08, 2025 06:52 ET (10:52 GMT)
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