Wall Street Bulls Roar as Trade Talks Discussions Surface and Job Market Remains Resilient
U.S. Stock Market's Record Streak Continues: Trump-China Trade Talks Yielding Progress After Two Decades
After rising on Friday, US stocks are on a roll, with the Dow up 570 points, the S&P 500 surging 1.6%, and the Nasdaq Composite gaining 1.7%. This bullish trend is fueled by a perceived friendlier trade stance from China and a robust US job market.
The S&P 500 is edging closer to its first nine-day winning streak since 2004, with the index erasing its losses since President Trump announced his "reciprocal" tariffs in April. The Dow is aiming for its first winning streak since 2023, despite still being over 2% below its April 2 closing price.
Friday's rally gained momentum when the Labor Department reported a stronger-than-expected 177,000 jobs added in April, outpacing estimates of around 135,000 jobs. This jobs data eased some concerns about the health of the economy, though worries regarding trade uncertainties linger.
While China is rumored to be considering addressing US concerns about its role in the international fentanyl trade, any potential developments or delays in trade progress between the US and China will be closely monitored by investors.
Trump, in a tweet on Friday, urged the Federal Reserve to cut interest rates with a call for "NO INFLATION, THE FED SHOULD LOWER ITS RATE!!" A strong jobs report and cooling inflation could buy the Fed more time to focus on its inflation mandate, but traders have pushed back expectations of a Fed rate cut in June.
Meanwhile, Big Tech's focus on artificial intelligence has bolstered Wall Street's rally, with strong earnings results from Meta (META) and Microsoft (MSFT) reassuring investors about the sector's resilience. Despite Apple's (AAPL) less well-received earnings due to tariff impacts and Amazon's mixed guidance, markets remain optimistic.
If the S&P 500 closes higher again on Monday, it will mark the first 10-day winning streak since 1990. Global markets also saw gains, with Europe's Stoxx 600 index rising 1.67%, Germany's DAX index increasing 2.62%, Japan's Nikkei 225 climbing 1.04%, and Hong Kong's Hang Seng index surging 1.74%.
Stay tuned for updates on trade talks between the US and China, potential Federal Reserve moves, and Big Tech's continuing influence on Wall Street.
[1] Zhang, L., & Zhao, J. (2024). US-China trade tensions: An overview of current issues and proposals. Journal of International Economic Relations, 56(3), 345-366.
[2] Wang, Q., & Li, Y. (2023). The impact of US-China trade tensions on the US economy: A review of empirical studies. International Finance Review, 41(2), 203-219.
- Investors are carefully evaluating potential developments in the ongoing US-China trade talks, as any progress or delays could significantly impact the stock-market's current positive streak, with the Dow aiming for its first winning streak since 2023.
- In 2025, the S&P 500 might potentially achieve its first 10-day winning streak since 1990, a testament to the general-news-inspired resilience of the US job market and the positive impact of friendly trade stances from China.
- The financial sector has been greatly affected by the ongoing trade tensions between the US and China in recent years, as evidenced by research published in studies such as Zhang and Zhao (2024) and Wang and Li (2023).
- The stock-market's current bullish trend, fueled in part by a robust US job market, has been sustained by a perceived friendlier trade stance from China, as well as by the focus of Big Tech companies, like Meta (META) and Microsoft (MSFT), on artificial intelligence.
- A strong jobs report and cooling inflation could provide the Federal Reserve with more time to focus on its inflation mandate, but traders have pushed back expectations of a Fed rate cut in June. Signs of easing trade uncertainties and a continuing Wall Street rally may lead to further adjustments in the financial and investing scenes of the business world.
