Dow Jones Industrial Average rises following tariff walkbacks

• The Dow Jones Industrial Average gained ground on Tuesday.
• Investor sentiment is rebounding after US President Trump delayed his own tariffs once again.
• Trump's proposed additional 50% tariff on EU goods has been delayed until July 9.

The Dow Jones climbed alongside other major equities on Tuesday, with investor sentiment snapping back after last week's declines. The Trump administration has delayed new tariff threats once again, and investors have become firmly entrenched in the belief that when United States (US) President Donald Trump threatens new tariffs, the next step will be a walkback of those tariffs. To his credit, Donald Trump has done little to break that pattern. Consumer confidence survey results also rebounded in May, snapping a five-month losing streak.

US President Trump recently mused via social media about imposing an additional 50% across-the-board tariff on all imports from the European Union (EU) beginning on June 1. However, President Trump has already walked back his own tariff threat in a pattern that has become increasingly familiar to equity markets, pushing the 50% EU tariff deadline back to July 9.

The Consumer Board (CB) Consumer Confidence print for May came in stronger than expected, with the aggregated survey index rebounding 12.3 points to 98.0 after five straight months of declines that saw the sentiment index sink to a four-year low of 85.7. Consumers' feelings about the US economy are rebounding after getting rattled by the Trump administration's lopsided trade strategies, and the number of surveyed consumers who expect a recession in the next 12 months fell during the May reference period.

Despite rising sentiment on President Trump's favorite pastime of canceling or delaying his own tariff threats, analysts remain cautious. According to Adam Crisafully of Vital Knowledge, "Trump's most bombastic tariff threats ... won't become a reality, but he's still imposed substantial import taxes in just the last four months, and his administration is probably not finished."

Dow Jones price forecast

The Dow Jones is up over 650 points from last Friday's close, forming a technical rejection of the 200-day Exponential Moving Average (EMA) and reclaiming the 42,250 level for the third time this month. The major equity index remains down from its most recent highs near the 42,800 region, but momentum favors further upward moves.

Daily candlesticks are poised to snap a lower-high pattern baked into the charts ever since the Dow Jones tumbled from record highs north of 45,000 in January. However, a firm discount window looms over the Dow as headlines about US trade policy dominate market sentiment.

Dow Jones daily chart