European Stocks Rally After Trump's 50% Tariff Delay, Dollar Hits 1-Month Low: What's Driving Markets Monday?

While U.S. markets remained closed Monday for Memorial Day, European equities surged after President Donald Trump agreed to delay a planned 50% tariff on European Union imports, easing investor concerns and reviving risk appetite.

In a Sunday phone call with European Commission President Ursula von der Leyen, Trump confirmed that the tariffs, which had been slated to take effect on June 1, will be pushed back to July. The decision opens a window for further negotiations aimed at avoiding a disruptive escalation in transatlantic trade tensions.

The Eurozone's STOXX 50 index, mirrored by the iShares MSCI Eurozone ETF EZU, climbed 1.3% to close at 5,397. The broader STOXX 600 added 1% to finish at 550, with German autos leading the advance.

Shares of Germany's leading carmakers—Volkswagen AG VWAGY, BMW AG BMWYY, and Mercedes-Benz AG MBGYY—each rallied around 2%, clawing back losses from Friday's session. These companies are among the most exposed to potential U.S. tariffs, and their gains reflect growing optimism that a negotiated outcome may be reached.

The U.S. dollar remained under pressure as the euro extended its recent gains, nearing $1.14—its highest level in a month as currency markets appear to be pricing in a more stable outlook for the EU economy if the tariff threat is ultimately defused.

Gold prices slipped modestly in thin holiday trading, with bullion down 0.6% to $3,336 per ounce as the temporary U.S.-EU trade truce reduced safe-haven demand.

Meanwhile, sentiment in crypto markets remains upbeat. Bitcoin BTC/USD rose 1% to trade above $110,000, hovering near its all-time highs as digital asset demand continues to run hot.

Monday’s Market Snapshot

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Image: Shutterstock/Giulio Benzin