Stocks Rebound Ahead Of U.S.-Japan Trade Negotiations

Stock trading appeared to stabilize late Monday after days of volatility on the heels of President Donald Trump’s sweeping tariff announcement.

The opening of trade negotiations between the United States and Japan appeared to buoy stock prices on the hope that the tariffs, announced last week by Trump in a “Liberation Day” Rose Garden event, may be avoided, according to Reuters. As of Tuesday afternoon, the Dow Jones was trending back down after a 3.5% jump in the morning hours. The S&P 500 was also up 3.6% Tuesday morning before it dipped in the afternoon. The Nasdaq jumped by 4.5% before it also dropped later in the day. 

Shares in Japan showed strength as the Nikkei stock index closed up 6% on Monday. Trump announced on Monday morning that he had spoken with Japanese Prime Minister Shigeru Ishiba about beginning negotiations over trade.

“Countries from all over the World are talking to us. Tough but fair parameters are being set. Spoke to the Japanese Prime Minister this morning. He is sending a top team to negotiate!” Trump posted on Truth Social on Monday morning.

U.S. Treasury Secretary Scott Bessent is set to lead negotiations with Japan over tariffs.

“Importantly, a little ray of sunshine is starting to emerge that gives hope that the U.S. is genuinely open to trade negotiations, [with] the most significant being Japan with Treasury Secretary Bessent,” Tapas Strickland, the head of market economics at National Australia Bank, told Reuters.

Stock indexes across Asia, Europe, and the United States also showed some positive signs alongside hopes that the White House is open to negotiations.

Japan received other welcome news after Trump signed an executive action on Monday reopening the potential purchase of U.S. Steel by Japan’s Nippon Steel. Trump’s order gives the U.S. Committee on Foreign Investment 45 days to review the agreement and submit a recommendation.

“I direct the Committee on Foreign Investment in the United States (CFIUS) to conduct a review of the acquisition of U.S. Steel by the Purchasers to assist me in determining whether further action in this matter may be appropriate,” the order says in part.

Former President Joe Biden previously blocked the nearly $15 billion deal in January. At the time, Trump agreed with the decision. He had previously pledged to block the deal and stop U.S. Steel from being “bought by a foreign company.”

Trump appeared to warm to a potential deal in February when he said he would be open to Nippon Steel investing in U.S. Steel, though the president said he still opposed foreign ownership.