Market News

Despite rising U.S.-China tariff tensions, Wall Street closed higher on Friday amid inflation concerns and market volatility. The Nasdaq Composite, the Dow and the S&P 500 ended in positive territory.

How Did the Benchmarks Perform?

The Dow Jones Industrial Average (DJI) rose 1.6%, or 619.05 points, to close at 40,212.71. Twenty-six components of the 30-stock index ended in positive territory, while four ended in negative.

The tech-heavy Nasdaq Composite advanced 337.15 points, or 2.1%, to close at 16,724.46.

The S&P 500 gained 95.31 points, or 1.8%, to close at 5,363.36. All 11 broad sectors of the benchmark index closed in the green. The Materials Select Sector SPDR (XLB), the Energy Select Sector SPDR (XLE) and the Technology Select Sector SPDR (XLK) rose 3%, 2.5% and 2.1%, respectively.

The major gainer in the S&P 500 Index was Monolithic Power Systems, Inc. MPWR, whose shares rose 10%. Monolithic Power Systems currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

The fear gauge CBOE Volatility Index (VIX) decreased 7.8% to 37.56. A total of 19.19 billion shares were traded on Friday, lower than the last 20-session average of 18.74 billion. The S&P 500 posted one new 52-week high and five new lows. The Nasdaq Composite recorded 21 new highs and 147 new lows.

Tariff War Fuels Inflation, Delays Fed Rate Cut

The U.S.-China trade dispute intensified when Beijing raised its import tariffs to 125% because of U.S. duty increases on Chinese products, which resulted in 145% effective tariffs between the two nations. The situation has intensified pressure on worldwide markets.

The University of Michigan recorded a consumer sentiment reading of 50.8 in April, marking the lowest point since June 2022 due to rising concerns about inflation. The U.S. Bureau of Labor Statistics showed that the Producer Price Index (PPI) for final demand decreased by 0.4% in March, following a 0.1% rise in February, but the core PPI increased by 0.3%, which showed ongoing price pressure.

Investors now expect the Federal Reserve to lower interest rates in December because of tariff effects on prices. The ongoing trade tensions combined with increasing inflation risks have maintained high economic uncertainty.

Weekly Roundup

During last week, the S&P 500 climbed 5.7%, marking its best week since November 2023. The Nasdaq jumped 7.3% for its strongest weekly gain since November 2022, while the Dow rose nearly 5%.

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This article originally published on Zacks Investment Research (zacks.com).

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