Stocks rebounded Tuesday despite President Donald Trump’s weekend announcement of a sweeping 15% tariff on all imports to the United States, a move prompted by the Supreme Court’s recent decision to strike down his previously implemented country-specific tariffs. The S&P 500 rose 0.74%, the Nasdaq Composite gained 1.02%, and the Dow Jones Industrial Average increased 0.8% by late trading.
The market’s reaction has surprised some observers, with Paul Skinner, investment director at Wellington Management in London, telling CNBC that investors appear “used to his little explosions.” Skinner characterized the market response as an example of the “TACO” trade – “Trump Always Chickens Out” – reflecting a pattern of the president threatening tariffs only to later delay or abandon them.
Technology stocks led the gains, fueled in part by a massive deal between Meta and Advanced Micro Devices (AMD). Meta announced plans to purchase data chips and computers designed for artificial intelligence models from AMD over a five-year period, beginning in the second half of 2026. AMD’s stock jumped 9.19%, while Meta shares rose 0.23%.
AMD CEO Lisa Su stated the agreement is valued at “double-digit billions” of dollars per gigawatt, with the overall deal exceeding $100 billion, according to the Wall Street Journal. This investment follows Meta’s earlier announcement of planned investments between $115 and $135 billion for the current year.
Elsewhere, Paramount Global has submitted a new bid for Warner Bros. Discovery (WBD), after WBD opened the door last week for a “last and best” offer. WBD confirmed the receipt of the bid but provided no details, stating it would update shareholders after a review. The WBD board continues to recommend the existing offer from Netflix. Paramount shares fell 1.37%, while Warner Bros. Discovery rose 0.8% and Netflix gained 1.78%.
The tariff announcement, intended to replace the tariffs invalidated by the Supreme Court, has yet to elicit a formal response from trading partners. The White House has not specified a timeline for the implementation of the new 15% tariff, leaving uncertainty about its potential impact on global trade.
