The US stock market experienced a wild week of trading as investors grappled with the ongoing tariff war between the US and China. The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all posted their best weekly gains since 2023, despite the turbulent trading environment. On Friday, the S&P 500 rose 1.8%, the Nasdaq Composite climbed 2.1%, and the Dow advanced 1.5%, or about 600 points.
The week was characterized by shifting market sentiment and trade policy turbulence, with the Trump administration increasing tariffs on China while pausing tariffs for 75 other countries. The benchmark 10-year Treasury yield climbed to its highest level since February, closing around 4.5%, while the dollar index tumbled below the 100 threshold. Gold hit a fresh record high as investors sought safe-haven assets amidst the uncertainty.
Stocks gain despite trade tensions
The Chinese government announced on Friday that it will raise duties on imports of US goods to 125% in response to the increased tariffs from the Trump administration earlier in the week. Big Wall Street banks kicked off the first-quarter earnings season, with results from JPMorgan.
The Federal Reserve indicated its readiness to stabilize markets if necessary, with Boston Fed president Susan Collins stating that the central bank has tools to address any market functioning or liquidity concerns. Nvidia, the AI chipmaker, led the “Magnificent Seven” group higher over the five-day period, with the broader Tech, Industrials, and Financials sectors among the biggest gainers. Ryan McIntyre, a senior managing partner at asset manager firm Sprott, commented on the shift in appetite for US assets, saying, “The new highs in gold are signaling a shift in appetite for US assets.
Confidence in the US has clearly been shaken, so people are looking to diversify.”
Despite the weekly gains, the major indexes remain negative for the year, with investors closely watching trade developments and economic signals in the coming weeks.
