By Brian Swint

Overseas stocks were pushing higher on Monday as the U.S. remained shut for Presidents Day.

Meantime, President Donald Trump's delays to planned tariffs were helping both to lift stocks and keep the dollar lower, while efforts to quickly end Russia's war with Ukraine are bolstering European defense stocks.

The good news was that Trump hasn't yet enacted broad-brush tariffs on imports. He delayed measures aimed at Canada and Mexico, and plans for reciprocal tariffs -- which would be designed to match any tariffs other countries put on U.S. goods -- are still being studied and don't have a specific time frame to take effect. Companies are worried that the new taxes will raise the cost of doing business, fan inflation, and slow economic growth.

The reprieve is keeping the U.S. dollar lower. The dollar index, a measure of the greenback against a basket of peers, was at 106.86, up slightly from Friday but well below levels above 108 seen a week ago. The dollar was down against the Japanese yen at about 151 early Monday, it was slightly higher against the euro, and little changed against the U.K. pound.

At the same time, Trump's promise to cut military spending has hurt U.S. defense stocks and lifted European ones. If the U.S. pares back its presence in Europe, it will be up to European countries to spend more on arms and equipment. The Stoxx Europe Total Market Aerospace & Defense Index rose 0.7% early Monday. BAE Systems, the biggest U.K. defense stock, was up 4.9%, while Thales -- a French company that specializes in artificial intelligence software for defense similar to Palantir -- was up 2.8% in Paris.

The week ahead will be a busy one for markets. There are a raft of speakers from the Federal Reserve, which is now expected to keep possible interest-rate cuts on pause for a few months to come. Patrick Harker, Michelle Bowman, and Christopher Waller all speak Monday. Minutes of the January meeting will be published on Wednesday.

Overall, the Stoxx 600 Europe rose 0.2% early Monday. The FTSE 100 in the U.K. added 0.1% and Germany's DAX gained 0.2%.

Asian shares were also up on balance. Japan's Nikkei closed 0.1% higher and the Shanghai Composite finished up 0.3%. The Hang Seng in Hong Kong closed less than 0.1% lower.

Write to Brian Swint at brian.swint@barrons.com

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February 17, 2025 04:43 ET (09:43 GMT)

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