The U.S. stock market is having quite the party lately. If things go as expected, the S&P 500 could close its ninth straight winning session, something it hasn’t managed since 2004. That was back when people still flipped open their phones, and MySpace was the big thing online.
Today’s rally has a little bit of everything, like soft trade talks from China, a dash of optimism around U.S. jobs data, and just enough uncertainty to keep things interesting.
On Friday morning, futures on the S&P 500 rose by 0.4 percent, putting the index on track to hit that elusive nine-day streak. Across the Atlantic, European markets were feeling even more upbeat.
The Stoxx 600 Index surged over 1 percent, suggesting that investors there also enjoyed the tone shift in global affairs. Meanwhile, the dollar weakened slightly and U.S. Treasuries were mostly unchanged as traders braced for the all-important U.S. payrolls report.
That jobs report is expected to show that hiring slowed in April, with economists projecting around 135,000 new positions added. That would be a notable drop compared to March’s blowout numbers. Still, a stable unemployment rate could calm nerves and dampen fears about an impending recession.
The timing of the payroll survey is interesting, and it was conducted during the second week of April, right when President Trump paused some tariffs and dramatically increased others on Chinese imports. That policy shuffle may have skewed business sentiment just enough to leave its mark on the employment data.
Investors appear increasingly hopeful that Trump might embrace a more market-friendly tone in the months ahead. According to Bank of America’s Michael Hartnett, if Friday’s job data shows resilience, it might help dial down recession fears even more. The idea is that if the economy keeps showing signs of life, we might escape the gloomier forecasts floating around earlier this year.
Still, not everything is sunshine and rainbows. Apple shares slipped by 2.9 percent after it reported falling sales in China and warned that tariffs could drive up costs. Amazon didn’t fare much better, dropping 0.6 percent after giving a downbeat forecast for operating income. It’s bracing for tougher times ahead, and Wall Street noticed.
Even with some tech giants facing turbulence, the overall sentiment has improved. Kevin Thozet of Carmignac, an investment firm in Paris, put it this way: “It seems we may have reached peak policy uncertainty.”
The chaos might finally be plateauing. With some tariff chatter calming down and earnings season not being as terrible as feared, the mood has lightened a bit. Of course, that doesn’t mean we’re heading for smooth sailing, but the storm clouds have at least parted for now.
Traders are also increasingly convinced that the Federal Reserve might have to step in with rate cuts. Money markets are now pricing in nearly four quarter-point cuts in 2025. That’s one more than investors anticipated before Trump made his tariff moves public on April 2. It’s funny how fast expectations can shift when politics and economics collide.
Asia also joined the rally. The MSCI benchmark for the region climbed 2 percent. A statement from China’s Commerce Ministry helped fuel the optimism. It noted that senior U.S. officials have been vocal about wanting to talk, and urged Washington to show “sincerity.” For traders hungry for any sign of de-escalation, that was enough to put some wind in the sails.
Elsewhere in the markets, the Bloomberg Dollar Spot Index dipped by 0.5 percent. The euro rose to 1.1340 dollars, while the British pound edged up to 1.3296. The Japanese yen also saw a 0.6 percent boost, trading at 144.51 per dollar. On the crypto front, Bitcoin rose 0.6 percent to nearly 97,085 dollars, while Ether slipped by 0.3 percent to around 1,834 dollars.
In bonds, yields on 10-year U.S. Treasuries stayed put at 4.21 percent. Germany’s 10-year yield climbed three basis points to 2.47 percent, while Britain’s dropped five basis points to 4.43 percent.
Over in commodities, oil prices dipped slightly. West Texas Intermediate crude fell 0.8 percent to 58.79 dollars a barrel. On the flip side, gold continued its climb, rising 0.8 percent to 3,265.94 dollars an ounce.
All in all, investors seem to be clinging to a cautious kind of hope, the type that says, maybe things aren’t perfect, but they’re not falling apart either. And in today’s market, that’s enough for a rally.
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