U.S. equity markets opened sharply higher Tuesday, with major indexes rallying as stabilizing signals from Japan’s bond market soothed global rate fears and lifted investor sentiment. Positive news regarding the U.S. tariff threat against the E.U. also helped raise markets at the open. President Donald Trump posted on Truth Social, "I have just been informed that the E.U. has called to quickly establish meeting dates. This is a positive event, and I hope that they will, FINALLY, like my same demand to China, open up the European Nations for Trade with the United States of America."

Opening Bell: Risk Appetite Returns

At the open, the Dow Jones Industrial Average jumped 405.93 points, or 0.98%, to 42,009.0. The Nasdaq Composite led gains with a 1.58% advance, rising 295.18 points to 19,032.4, while the S&P 500 climbed 69.81 points, or 1.20%, to 5,872.63.

Traders pointed to easing pressure in long-dated Japanese government bonds (JGBs) as a key driver of the upbeat tone. Japan’s Ministry of Finance (MOF) over the weekend initiated a rare consultation with primary dealers, gauging appetite for future JGB issuance. The move, interpreted by strategists as a precursor to a cut in super-long bond supply, prompted a sharp drop in yields: Japan’s 30-year JGB yield fell 19 basis points to 2.85%, and the 10-year yield eased 5 basis points to 1.46%.

This pullback in yields has reverberated across global bond markets. U.S. Treasury yields declined in sympathy, with the 30-year yield falling 7 basis points to 4.96%. “The questionnaire looks like it is part of a strategy to prepare the market for a temporary scaling back of super long JGB issuance,” a J.P. Morgan strategist noted.

Investor Relief: Global Volatility Eases

The MOF’s shift has been viewed by market participants as a proactive attempt to calm turbulence following a failed 20-year bond auction last week—the weakest in a decade. With the Bank of Japan tapering its bond purchases and traditional buyers sitting out, Tokyo’s debt market had faced growing concerns over supply-demand imbalances. “We’ve been arguing that something had to give to correct the supply-demand imbalance. The market is thinking it will be the MOF,” strategists at Société Générale said.

This renewed policy responsiveness has rippled across risk assets. With Japan’s status as the largest foreign holder of U.S. Treasuries—holding over $1.13 trillion—investors had worried that rising JGB yields might spur Japanese institutions to repatriate funds, pressuring U.S. rates. That fear appears to have receded, at least temporarily.

Tech Spotlight: Nvidia on Deck

Meanwhile, anticipation is building for Nvidia’s earnings report due Wednesday. Analysts expect Q1 revenue of $43.3 billion, driven by AI infrastructure demand. While a $5.5 billion write-down linked to restricted China-bound chips will weigh on results, investors are optimistic about the company's next-generation Blackwell platform and strong sovereign AI demand. CFRA analyst Angelo Zino noted, “The confidence has definitely increased here for a lot of investors”.

As global bond anxiety eases and corporate catalysts loom, U.S. stocks appear poised to extend gains—if current sentiment holds.