Stock Market Rally Endures for Ninth Consecutive Day, Recovering Losses Instigated by Tariff Intensification
Stock Market Steals the Show Despite Trump's Trade War
NEW YORK - The stock market roared to its ninth consecutive victory on Friday, smiling back at April 2004's victorious streak and reclaiming the ground lost since President Trump launched his trade war in early April. This triumphant rally came following a better-than-predicted employment report and a breathing space in the U.S.-China trade battle.
The Standard and Poor's 500 soared 1.5%, the Dow Jones industrial average added 1.4%, and the Nasdaq composite rose 1.5%. This impressive growth was seen across the board, with about 90% of stocks in the S&P 500 experiencing upswings, and technology stocks fired up the action. Microsoft inched up 2.3%, while Nvidia climbed 2.5%. However, Apple slipped 3.7% as the iPhone giant forecasted tariff-related losses of $900 million.
Banks and financial companies also made headway, with JPMorgan Chase and Visa recording gains of 2.3% and 1.5%, respectively.
The job market showed a growth of 177,000 positions in April, marking a slowdown from March's numbers, but beating economists' expectations. This growth doesn't represent the impact of tariffs currently in effect on the U.S. economy.
Experts hint that if the administration continues with their original tariff plan in July when the three-month delay on some tariffs expires, market action similar to April's first week would recur unless a different approach is taken[1].
Equities slumped 9.1% during the first week of April when Trump announced an intensification of the trade war. Since then, the market has been on a comeback trail, bolstered by resilient Q1 earnings from U.S. companies, lowered trade tensions with China, and speculations that the Federal Reserve will still cut rates a few times this year.
The S&P 500 ultimately rose 82.53 points to 5,686.67, the Dow gained 564.47 points to 41,317.43, and the Nasdaq added 266.99 points to 17,977.73.
The employment market is becoming increasingly scrutinized in light of trade battle concerns. Solid employment has fueled strong consumer spending and economic growth over the past few years. However, fears of increased costs associated with tariffs on imports loom large, particularly due to potential harm to hiring and spending[1].
The economy is showing early signs of stress, with the U.S. economy contracting at a 0.3% annual rate during the first quarter of the year due to surging imports ahead of Trump's tariffs.
The trade conflict has cast uncertainty upon businesses and households, causing companies to trim and revise their financial forecasts because of the unpredictability surrounding the tariffs and their effects on costs[1].
Offers of trade agreements have been expounded by China, with tariffs amounting to 145% under review[1]. Investors are keeping their eyes on the negotiations between the two nations.
The bond market experienced a rise in yields, with the 10-year Treasury bumping its rate to 4.31%.
Troise and Veiga pen for Associated Press.
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Additional Insights:
- The trade war between the U.S. and China has generated volatility in the stock market as investors search for clarity on the trade conflict.
- Tariffs introduced by the U.S. have increased input costs for U.S. companies, potentially impacting profit margins and, consequently, share prices.
- Businesses and households have struggled amid the uncertainty surrounding the tariffs, causing companies to revise their financial forecasts due to the uncertainty surrounding the tariffs' costs and impact on spending.
- As the U.S. economy enters a slowdown in 2025, ongoing trade tensions and potential tariff effects will likely have a role in the slowdown.
- Technology companies took the lead, driving growth in the stock market during the win streak. However, the iPhone maker, Apple, experienced losses as it estimated tariffs would cost it $900 million.
- The looming escalation of tariffs could cause market action similar to early April, potentially causing further losses, unless a different approach is taken by the administration in July.
- The stock market's nine-day winning streak in April mirrored April 2004's streak, offsetting the losses due to President Trump's trade war.
- Technology stocks, such as Microsoft and Nvidia, spearheaded the market's growth, despite Apple forecasting tariff-related losses.
- Amid trade battle concerns, the employment market's growth is under evaluation, with fears of increased costs from tariffs on imports.
- The economy has shown signs of stress, with the U.S. economy contracting at a 0.3% annual rate during the first quarter of the year due to surging imports ahead of Trump's tariffs.
- Businesses are revising their financial forecasts due to unpredictability surrounding tariffs and their effects on costs, as trade negotiations between the U.S. and China continue.
- As the administration mulls over further tariffs in July, a repeat of the volatile market activity seen in early April is possible, depending on the approach taken.
- The prospected escalation of tariffs could have a significant impact on the business and investing sectors, particularly in the technology industry, due to potential increased costs and losses.
