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Financial markets

US Stocks Rally Amid Easing Global Trade Tensions and Positive US Economy Data

Strategic Insights

— 2 min read

US stocks are experiencing a rally on Friday, with the Dow 30 index poised for gains, the S&P 500 set for its fifth-straight win, and the Nasdaq Composite also set to rise, driven by optimism over the US-China trade deal and easing inflation pressures. This week has been relatively positive for the US markets, with the S&P 500 up 4.5%, the Dow gaining 2.6%, and the Nasdaq Composite jumping over 6%. Despite ongoing concerns about the impact of tariffs on inflation, economic growth, and corporate earnings, the latest reports on April retail sales and weekly unemployment claims met economists' forecasts, and a closely watched indicator of wholesale level inflation showed an unexpected dip in prices last month.

Key Takeaways:

  • The S&P 500 is up 4.5% week-to-date, with the Dow gaining 2.6% and the Nasdaq Composite jumping over 6%.
  • The rally in US stocks is driven by optimism over the US-China trade deal and easing inflation pressures.
  • The latest reports on April retail sales and weekly unemployment claims met economists' forecasts, and a closely watched indicator of wholesale level inflation showed an unexpected dip in prices last month.
  • Economists are watching retail sales as an important signal on whether consumer fears about President Donald Trump's tariffs are making them hesitant to spend money.
  • Poor consumer sentiment surveys haven't resulted in a meaningful decline in spending, mainly as people rush to buy items before tariffs raise prices.
  • However, economists still expect a slowdown as tariffs work through the economy.
  • Some large American corporations, such as Walmart, are expressing concerns about rising prices and a bleak macroeconomic forecast.
  • Walmart announced that it will most likely have to hike prices on some items in late May owing to tariffs.
  • The pause in the US-China trade war has been met with doubts about the Federal Reserve cutting interest rates soon, as fears of an impending recession are easing.
  • Bond markets are still eyeing at least one Fed cut this year, even as they start pricing in chances of a longer Fed delay.

Statistics:

  • S&P 500 up 4.5% week-to-date
  • Dow 30 index gaining 2.6%
  • Nasdaq Composite jumping over 6% this week
  • April retail sales met economists' forecasts
  • Weekly unemployment claims met economists' forecasts
  • Wholesale level inflation showed an unexpected dip in prices last month
  • May 2025 CPI data are scheduled to be released on June 11
  • Federal Open Market Committee (FOMC) meeting on June 17-18

Sources:

  • IE Online Media Services Pvt. Ltd. (2025)
  • Contify.com (distributed by IE Online Media Services Pvt. Ltd.)

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