The stock market managed a strong rebound after Thursday's broad losses, concluding a volatile week of trading.
Despite better-than-expected Q1 earnings from key financial players, the market opened on a weak note:
Market participants were concerned about the ongoing dollar weakness, rising Treasury yields, and a consumer sentiment drop in April, with inflation expectations reaching 6.7%, the highest since November 1981. Additionally, China responded to the U.S.'s 145% tariff rate with a 125% tariff rate on U.S. imports, stating it will ignore further U.S. tariff actions.
By mid-morning, stocks began to recover as the 10-year note yield decreased from 4.58% to 4.45%, closing the session at 4.49%, up 10 basis points. Mega-cap stocks led the charge, supported by the White House's reiteration of a potential deal with China and a report suggesting the Fed's readiness to stabilize financial markets if needed.
The major indices ended near their session highs. The Russell 2000 rebounded from a 1.6% decline to a 1.6% gain, trailing the S&P 500's 1.8% increase but slightly ahead of the equal-weighted S&P 500's 1.5% gain.
All 11 S&P 500 sectors posted gains of at least 1.1%, with materials (+3.0%), information technology (+2.6%), and energy (+2.5%) leading the way. Market breadth was positive, with advancers outnumbering decliners more than 2-to-1 at both the NYSE and Nasdaq.
Economic data review:
Jerome Dodson has made the following transactions:
Parnassus Value Equity Fund has made the following transactions:
Tweedy Browne International Value has made the following transactions:
Carl Icahn has made the following transactions:
Advanced Micro Devices (AMD, Financial) and Nvidia (NVDA, Financial) stocks rose significantly after news emerged that U.S. semiconductor companies outsourcing manufacturing are exempt from China's tariffs. This exemption, which includes firms like Qualcomm (QCOM, Financial) and AMD, has been a catalyst for their stock price increases, with AMD jumping around 5% and NVDA rising about 3%. Meanwhile, Taiwan Semiconductor Manufacturing (TSM, Financial) saw its shares climb by approximately 3% as well. However, companies such as Texas Instruments (TXN, Financial) and Intel (INTC, Financial), which operate their own U.S.-based fabs, faced declines of around 6% and 4%, respectively.
Bill Ackman (Trades, Portfolio), a prominent investor, raised concerns about the societal and economic contributions of highly leveraged ETFs and zero-day stock options. He questioned their benefits, pointing out the significant inflows into the ProShares UltraPro QQQ ETF (TQQQ), which saw record inflows this week. This highlights ongoing debates about the role of leveraged financial products in market volatility.
In the autonomous driving sector, Waymo, a division of Alphabet (GOOGL, Financial), made notable progress in Austin with its robotaxi service. The service captured 20% of the rides compared to Uber (UBER, Financial) in the area, indicating a growing acceptance of autonomous vehicles among consumers. This development shows that Waymo is gaining traction in the market, surpassing its initial launch metrics in San Francisco.
The FDA's new initiative to reduce animal testing in favor of AI-driven methods has led to a rally in AI-driven drug discovery firms. Companies such as Simulations Plus (SLP, Financial), Recursion Pharma (RXRX, Financial), and Schrödinger (SDGR, Financial) experienced significant stock price increases. This shift represents a paradigm change in drug evaluation, potentially accelerating the development of new therapies.
JPMorgan Chase (JPM, Financial) saw its stock rise by 3.5% after reaffirming its 2025 guidance for net interest income and reporting better-than-expected earnings. The bank's strong capitalization and ability to weather potential economic downturns have made it a standout in the financial sector, with a solid common equity tier 1 ratio of 15.4%.
Newmont (NEM, Financial) surged 8.2%, reaching its highest level in nearly six months, as gold prices hit record highs. UBS upgraded Newmont to a Buy rating, raising the price target to $60, citing positive operational momentum and potential for increased cash returns in a strong gold price environment.
Five Below (FIVE, Financial) halted shipments from China amid escalating U.S.-China trade tensions. With a significant portion of its merchandise sourced from China, the company faces increased costs due to tariffs, which could significantly impact its pricing strategy and profitability.
The bond market's volatility this week has been a major concern for investors, with Barclays highlighting the unusual swings as a key issue. The uncertainty in the bond market is seen as a challenge for risk assets, with various theories being discussed regarding the causes of the selloff.
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