Stock futures jumped on the news, while the dollar traded lower to give commodities like oil and gold a boost.
“There are two factors at play here: The talks coming out of North Korea are positive and Trump is getting pressure from the GOP and business leaders on tariffs,” said Peter Cardillo, chief market economist at First Standard Financial.
House Speaker Paul Ryan said Monday he was “extremely worried” about President Donald Trump’s trade plan. Congressional leaders will not rule out potential action if Trump decides to move forward with his tariff plan.
Trump announced last week the U.S. would be imposing new tariffs on aluminum and steel, before going onto threaten European carmakers with a tax on imports if the European Union retaliated over the U.S. administration’s tariff plans. However, on Monday, fears eased after
Trump suggested in a tweet that he could drop tariffs if a “new and fair” NAFTA agreement was signed.
“The market is now interpreting the tariffs announcement as a bargaining chip in the NAFTA negotiations,” said First Standard’s Cardillo.
Shares of General Motors, a company that would be adversely impacted by steel and aluminum tariffs, rose 0.3 percent.
But GM, along with the broader market, pared its gains after Bloomberg News reported citing sources that Trump was convinced Gary Cohn — his chief economic adviser — would leave the administration if the tariffs were implemented.
“If [Cohn] leaves it’s a big deal because that means the ‘America First’ people are taking over,” said Larry McDonald, head of the U.S. macro strategies at ACG Analytics and editor of The Bear Traps Report.
In corporate news, Nordstrom shares slipped 1.7 percent after the company rejected an offer from the Nordstrom family to take the company private for $50 per share. The Nordstrom family has been working to take the company private since last year.
—Reuters contributed to this report.
