By Katy Barnato and Hannah Erin Lang

Investors breathed a sigh of relief after the long weekend, following a brief flare-up in trade tensions between the U.S. and Europe.

Stock climbed in Tuesday trading, with the S&P 500 rising 1.7%. The dollar strengthened, and Treasury yields fell amid a global bond rally. European stocks extended Monday's gains, with Germany's DAX index hitting a record intraday high.

On Friday, President Trump threatened to impose a 50% rate on the European Union within days and warned Apple that foreign-made iPhones could face significant levies. That helped push stocks into the red.

But after a weekend phone call with European Commission President Ursula von der Leyen, Trump said he would delay the introduction of new EU tariffs until July 9. The EU said it would fast-track talks with the U.S.; trade chief Maroš Šefčovič said the bloc wants to avoid the "mutual pain of tariffs." In a post on Truth Social, Trump said the EU had called to set dates for trade talks.

A better-than-expected consumer confidence report also is boosting optimism on Wall Street.

"We've come a long way from Liberation Day," said Eric Sterner, chief investment officer at Apollon Wealth Management. "We just need to get past this uncertainty so companies and consumers can plan ahead."

Up ahead, a cluster of S&P 500 companies are left to report earnings this week, including artificial-intelligence heavyweight Nvidia on Wednesday.

Investors also will eye the Federal Reserve's minutes from its last policy meeting this week, and the April reading of the Fed's preferred inflation gauge. Early Tuesday, Minneapolis Fed President Neel Kashkari called for keeping policy on hold until there is more clarity on the global trade outlook. Meanwhile, new data showed durable-goods orders slid in April, the month Trump unveiled his sweeping levies.

In recent trading:

Major U.S. stock indexes rose. The tech-heavy Nasdaq Composite led gains, up more than 2%.

U.S. Treasurys rallied. The 10-year yield ticked down, after settling Friday above 4.5%. Yields fall as bond prices rise.

Longer-dated government bonds rallied globally. Moves were especially sharp in Japan, on speculation Tokyo could scale back issuance of long bonds.

The WSJ Dollar Index strengthened. It settled Friday at its weakest level since September.

Gold futures dropped more than 2%.

Bitcoin traded around $110,000, close to record highs.

Write to Katy Barnato at katy.barnato@wsj.com and Hannah Erin Lang at hannah.lang@wsj.com

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(END) Dow Jones Newswires

May 27, 2025 12:23 ET (16:23 GMT)

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