The US Futures Market Rallies as Traders Return to Tech

U.S. stock futures rallied on Monday, with Nasdaq 100 futures jumping 1.2% as investors seized the opportunity to buy beaten-down technology shares. Optimism was also fueled by reports suggesting that upcoming U.S. tariffs might be more narrowly targeted rather than broadly applied. S&P 500 futures also climbed about 1% in early trading, reflecting a more positive sentiment among market participants.

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In the premarket session, Tesla Inc. saw its shares rise by approximately 4%, while chipmaker Nvidia Corp. and software firm Palantir Technologies Inc. also gained ground. Their advances followed news that Jack Ma’s Ant Group Co. had developed artificial intelligence techniques capable of cutting costs by 20%, a development that could enhance efficiency across multiple industries.

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Meanwhile, the U.S. dollar weakened, and Treasury yields edged higher as investors assessed the broader economic landscape. In Europe, stock indexes showed minimal movement overall. However, a significant shift occurred at the top of the region’s corporate rankings: German software giant SAP SE overtook Denmark’s Novo Nordisk A/S to become Europe’s most valuable publicly traded company. Novo Nordisk, which has seen its stock decline by 18% so far this year, had previously held the top spot due to strong demand for its weight-loss medications.

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Market sentiment was buoyed by indications that former U.S. President Donald Trump’s impending wave of tariffs may not be as aggressive as previously feared. According to officials, the administration is unlikely to announce sweeping, sector-wide tariffs all at once during an April 2 event.

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This contrasts with previous concerns that Trump might take a more aggressive approach, potentially disrupting global trade flows.

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“This increases the likelihood that certain industries and countries could be spared the worst of the impact, which helps explain why investors are reacting positively,” said Daniel Murray, CEO of EFG Asset Management in Zurich. The prospect of a more measured approach to tariffs eased concerns that broad-based trade restrictions could weigh heavily on corporate earnings.

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Morgan Stanley strategists are among those predicting a potential turnaround in U.S. stocks. In a note to clients, they highlighted two key factors that could drive renewed investor interest in U.S. markets: a weaker dollar, which has declined 3.8% from its peak in January, and signs that the earnings downturn for the so-called Magnificent Seven tech stocks—Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta, and Tesla—may be stabilizing. If these trends continue, they could encourage capital inflows back into U.S. equities.

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Elsewhere, geopolitical developments were also on investors' radar. In Turkey, the arrest of Ekrem Imamoglu, the main opposition leader and key political rival of President Recep Tayyip Erdogan, raised concerns about potential nationwide protests. The Turkish lira dropped 0.6% against the U.S. dollar, trading near record lows as uncertainty loomed over the country’s political stability.

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As markets continue to navigate economic and geopolitical shifts, investors are closely monitoring signals from policymakers, corporate earnings reports, and global trade developments to assess the outlook for stocks, bonds, and currencies in the coming weeks.

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