Pre-Market Pulse 28th May – Stocks bounce back sharply on consumer recovery

Stocks rose sharply overnight after U.S. consumer confidence rebounded following a five-month slump, cooling fears about the economy just days after President President Donald Trump postponed plans to impose steep trade tariffs on the European Union.
U.S. consumer confidence rebounded sharply in May, ending a five-month slide, as optimism surged following the announcement of a U.S.-China trade deal and a temporary pause in tariff hikes. The Conference Board’s Consumer Confidence Index jumped 12.3 points to 98.0, far exceeding expectations and marking the largest monthly gain in four years. The rebound was driven by improvements in both consumers’ short-term outlook—with the Expectations Index rising 17.4 points to 72.8—and their assessment of current conditions, as the Present Situation Index climbed to 135.9. This renewed optimism was broad-based, spanning all age, income, and political groups, though concerns about inflation and the impact of tariffs on prices persisted.

In the markets, major tech stocks led gains ahead of Nvidia’s highly anticipated earnings report, with the chipmaker’s shares climbing over 3% as investors looked for signals on global AI demand. Tesla also rallied more than 6% after CEO Elon Musk pledged to focus more on the company, helping restore some investor confidence. Meanwhile, CoreWeave soared over 20% despite a recent downgrade, and Salesforce shares advanced on news of its $8 billion acquisition of Informatica, strengthening its position in AI and data infrastructure. The broader earnings season is winding down, with nearly 78% of S&P 500 companies surpassing analyst expectation.

On the policy front, President Trump’s decision to delay a planned 50% tariff on EU goods until July 9, following talks with EU President Ursula von der Leyen, provided some relief to markets rattled by trade tensions. However, uncertainty remains high as investors await further developments in U.S.-EU trade negotiations and monitor the Federal Reserve’s response to ongoing tariff and inflation dynamics. Durable goods orders fell 6.3% in April, reflecting some underlying economic caution. Fed officials, including Neel Kashkari and John Williams, have advocated for holding interest rates steady amid tariff uncertainty, underscoring the fragile balance between supporting growth and containing inflation