US stocks gained on Friday, with the S&P 500 on track to achieve its longest winning streak since 2004. The positive momentum came as China indicated a willingness to engage in trade discussions, and investors reacted to a stronger-than-expected jobs report. The Dow climbed by 564 points, or 1.39%, while the S&P 500 and the Nasdaq Composite also saw significant gains of 1.47% and 1.51%, respectively. This marked the ninth consecutive daily gain for both the Dow and the S&P 500.
The S&P 500’s nine-day winning streak represents a milestone not seen since November 2004. Despite several past seven- and eight-day streaks, achieving nine continuous days of gains had been a challenge over the past two decades. This latest rally helped the S&P 500 recover from losses incurred following President Donald Trump’s announcement of tariffs on April 2.
The positive market sentiment was further buoyed by the release of Labor Department data showing an increase of 177,000 jobs in April, surpassing expectations. While concerns of a looming recession persist, market experts remain optimistic, with Chief Investment Officer Chris Zaccarelli pointing out that the current dynamic of buying opportunities may continue until the tariff pause expires.
Stocks have been on an upward trend as trade tensions ease between the US and China, with potential trade deals with other countries also in the pipeline. Developments in trade negotiations, especially during the 90-day pause on reciprocal tariffs with China, will be closely monitored for their impact on market stability.
The market also responded positively to reports that China is considering addressing US concerns regarding the fentanyl trade, indicating a willingness to engage in trade talks. This shift in tone raises hopes for potential negotiations between the two countries.
As the market remains focused on trade negotiations and economic data releases, the strong labor market performance offers some reassurance amid lingering uncertainties. Investors will be closely watching for further developments in trade discussions and their implications on the economy moving forward.
Last week saw a flurry of economic data releases, including a report from payrolls processor ADP indicating a significant slowdown in private sector hiring for April. CNN’s Fear and Greed index, which had briefly moved into a “neutral” zone on Thursday for the first time since February 19, slipped back into “fear” on Friday after being in that category for the past two months.
Concerns remain about the US trade approach for the rest of the year, as uncertainty lingers. Investors are closely monitoring policy developments, with a focus on navigating through this uncertainty in the weeks ahead. Despite some easing of concerns compared to recent weeks, the market may still fluctuate between pessimism and optimism depending on future developments.
President Trump took to social media on Friday to call for the Federal Reserve to lower interest rates, criticizing the central bank for not acting despite low inflation. A positive US jobs report could influence the Fed’s decision on rate cuts, with traders adjusting their expectations accordingly.
Inflation, while cooling, remains above the Fed’s target of 2%, giving the central bank more leeway to focus on its inflation mandate. Major financial institutions like Barclays and Goldman Sachs have revised their expectations for the first rate cut of the year to July from June.
On the global front, stock markets in Europe, Germany, Japan, and Hong Kong posted gains last week. The tech sector, particularly Big Tech firms like Meta and Microsoft, boosted Wall Street’s performance with strong earnings results. Meta and Microsoft shares surged, reflecting investor confidence in the sector’s focus on artificial intelligence.
While Meta showed resilience in its earnings report, Apple faced concerns over potential tariff impacts in the second quarter. Amazon also reported positive first-quarter results but offered mixed guidance for the year, leading to a slight dip in its shares on Friday.
If the S&P 500 extends its winning streak on Monday, it would mark the first 10-day winning streak since the 1990s. This ongoing market momentum reflects a mix of optimism and caution among investors amid evolving economic and policy landscapes.
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