Stocks closed sharply higher yesterday with most of the major indexes up by 2% or more.

Comments by President Trump on Sunday, saying that he would extend the deadline for a trade deal with the EU until July 9^th, rather than June 1^st, sent stocks soaring.

That reverses concerns from last Friday when President Trump said he was "recommending a straight 50% tariff on the European Union," citing that he was not happy with how talks were going, and that they were "very difficult to deal with," and that he was "not looking for a deal."

He clarified his frustration later saying that "talks were going nowhere" because of their indecisiveness and the collective decision-making of the 27-nation union.

Interestingly, stocks were lower on Friday on the news. But not as much as one would think. And it's likely because the markets correctly guessed that the strong words were a negotiating tactic to get the EU to speed things up.

And sure enough, on Sunday we learned that the President of the European Commission, Ursula von der Leyen, phoned Mr. Trump. She said they had a "good call," and added that "to reach a good deal, we would need the time until July 9." The President obliged and announced he would extend the deadline to July 9^th, sending stocks soaring in the futures market, and then yesterday in the regular session.

President Trump, on Friday, also said he was considering a 25% tariff on iPhones not made in the U.S. No word on if that will be rescinded or modified. That too came as a bit of a surprise after announcing exemptions on smartphones, semiconductors, and other electronic components and devices coming from China. It's unclear if those exemptions on goods from China would remain exempt or not. Or if the threatened 25% tariffs would be on those products coming from countries other than China. Either way, that too caught the market off guard last week.

Next week, 2 months will have elapsed since the President put a 90-day pause on reciprocal tariffs. Since then, only 2 'deals' have been announced ? the first with the U.K. The other with China, but that was only an agreement to slash tariffs for 90 days while both countries worked on details for a larger deal.

So the market is expecting to hear the announcement of many more trade deals in the coming weeks before the first 90-day pause expires.

In the meantime, the market likes what it's hearing regarding tariffs and trade.

Same goes for corporate earnings.

Even though Q1 earnings season is essentially over, posting another better-than-expected earnings season, we'll get earnings from Nvidia today, after the close.

While the AI trade is much larger than Nvidia, they have become the face of AI (at least as far as semiconductors go). And the market will be looking to them to see if chip demand and AI spending continues to grow.

In the meantime, there's plenty to be excited about with the markets. And the rally in stocks is reflecting that.

See you tomorrow,