Stocks rise on bank earnings and auto tariff relief hopes

Stock markets rose Tuesday as investors digested strong bank earnings and shares in several auto giants surged over hopes of tariffs relief from US President Donald Trump.

Some stability has returned to markets after last week’s roller-coaster ride over Trump’s stop-start tariff announcements, but uncertainty remains over speculation of new levies on high-end technology and pharmaceuticals.

“While financial markets have steadied, with many looking as if they are consolidating at current levels, this feels as if it is the calm before the storm,” said David Morrison, senior analyst at financial services firm Trade Nation.

“Markets remain skittish, and investors feel safer sitting on their hands for now, hoping that last week’s worrying dislocations revert back to normal,” he said.

Wall Street’s main indexes were in the green in late morning deals as investors also kept an eye on corporate earnings.

Shares in Bank of America and Citigroup climbed after the financial giants posted solid earnings reports.

Boeing slumped as Trump said China “reneged” on a major deal with the US aviation giant, after Bloomberg reported that Beijing ordered airlines not to take further deliveries from the company amid an escalating trade war. Shares in European rival Airbus rose.

European indices closed higher, with London and Frankfurt gaining 1.4 per cent each.

Paris made more modest gains, weighed down by shares in Louis Vuitton owner LVMH falling almost eight percent over weak sales. The group was overtaken by rival Hermes as France’s most valuable company by market capitalisation.

Shares in European and Asian automakers rallied following Trump’s comments on Monday that he was “very flexible” and “looking at something to help some of the car companies” hit by his 25 per cent tariff on all imports.

“This serves to double down on the weekend narrative that Trump will reverse some of his tariffs once company execs approach him to highlight the huge negative implications of his action,” said Joshua Mahony, chief market analyst at Scope Markets.

US-European automaker Stellantis, whose brands include Jeep, Fiat and Peugeot, gained over six per cent in Paris, while German brands Volkswagen and Mercedes-Benz advanced more than two per cent.

“We are encouraged by what President Trump indicated yesterday about tariffs for the car industry,” Stellantis president John Elkann said at the group’s annual shareholders meeting.

In Asia, Toyota jumped 3.7 per cent and Hyundai more than four per cent.

But in the United States, General Motors and Ford slumped.

Markets made a positive start to the week, rising Monday after the announcement of tariff exemptions for consumer electronic products, though Trump’s suggestion that the reprieve would be temporary tempered the optimism.

“Sentiment got a further boost thanks to positive noises about trade negotiations, which added to the sense that the administration is focused on making deals that could see the tariffs come down,” said Jim Reid, an analyst at Deutsche Bank.

Gold prices gained on Tuesday, helped by safe-haven demand as US President Donald Trump’s tariff plans kept investors wary of trade policy, while an overall weaker dollar also lent support.

Spot gold was up 0.4% at $3,221.32 an ounce as of 11:24am. Bullion hit a record high of $3,245.42 on Monday.

US gold futures rose 0.4% to $3,238.70.

“Traders are waiting for the next major fundamental development to drive the gold market, but the charts remain bullish. There’s still safe haven demand,” said Jim Wyckoff, senior analyst at Kitco Metals.

Federal Register filings on Monday showed that the US administration is advancing investigations into pharmaceutical and semiconductor imports in a bid to impose tariffs. Trump on Sunday said he would announce the tariff rate on imported semiconductors over the next week.

Gold, used as a safe investment during times of political and financial uncertainty, has risen over 23% so far in 2025 and scaled multiple record highs.

“The rise in the gold price is also partly in line with the continuing weakness of the dollar, which points to a gradual erosion of the US currency’s status as a safe asset - gold is likely to be an alternative for many USD investors,” Commerzbank said in a note.

“The short-term monetary policy outlook is providing further support for gold.”

The dollar was trading near a three-year low against its rivals, making gold more attractive for other currency holders.

Financial markets expect the US central bank to resume cutting interest rates in June after pausing in January, and reduce its policy rate by 100 basis points this year.

Investors now await comments from US Federal Reserve Chair Jerome Powell, who is scheduled to speak on Wednesday, for more clues on the interest rate path.

Elsewhere, spot silver eased 0.4% to $32.23 an ounce and platinum rose 1% to $961.05, while palladium gained 0.8% to $963.57.

Agencies