In New York, Wall Street experienced another volatile day on Friday, with a rollercoaster ride of ups and downs. The week was marked by alarming fluctuations driven by concerns over the U.S. economy and uncertainty surrounding President Donald Trump’s tariff policies.
Despite starting with losses, the S&P 500 managed to climb 0.6% by the end of the day, bouncing back from a 1.3% dip. This followed a tumultuous period where the index swung more than 1% up or down for six consecutive days. The Dow Jones Industrial Average also saw gains, adding 222 points (0.5%), while the Nasdaq composite rose by 0.7%.
This turbulent week, the worst for the S&P 500 since September, left the index around 6% below its recent all-time high. Federal Reserve’s reassurances on Friday afternoon helped calm the market; Fed Chair Jerome Powell stated that he believes the economy is currently stable and there is no immediate need to lower interest rates.
Following recent speculations of multiple rate cuts, Powell emphasized the importance of caution, highlighting that the economy is performing adequately. The release of the latest jobs report on Friday, showing a slight increase in hiring, supported this stance.
Despite signs of resilience in the labor market, concerns linger beneath the surface. The rise in part-time workers seeking full-time employment suggests potential challenges ahead. Uncertainty surrounding Trump’s tariff decisions has also created unease among businesses, leading to fears of reduced hiring and consumer spending.
Trump’s tariff policies, characterized by abrupt changes and exemptions, have added to the uncertainty. While the President aims to bring jobs back to the U.S., the unpredictable nature of tariff announcements continues to unsettle financial markets.
As Wall Street navigates through this period of uncertainty, the markets remain on edge, awaiting further developments and adjustments in the economic landscape.
Prior to stating, “I made a small contribution to that,” I granted a one-month exemption on tariffs for Mexican and Canadian imports for automakers. Following the release of the jobs report, Treasury yields initially dropped but later increased as Powell’s remarks prompted traders to scale back their expectations for multiple interest rate cuts this year. The 10-year Treasury yield dipped to 4.22% before rebounding to 4.30%, up from 4.28% the previous day. Since January, when it reached nearly 4.80%, the yield has generally been decreasing as investors have tempered their outlook on the U.S. economy’s growth.
On the financial front, Walgreens Boots Alliance saw a 7.5% boost after agreeing to a buyout by private equity firm Sycamore Partners. This acquisition would make the struggling chain private for the first time since 1927, granting it more flexibility to enact business improvements without concern for Wall Street reactions. Broadcom also experienced an 8.6% increase following better-than-expected profit and revenue for the latest quarter, along with a revenue forecast that surpassed analysts’ predictions, partly due to strong demand for its artificial intelligence products. Conversely, Hewlett Packard Enterprises faced a 12% decline after reporting slightly lower profits than analysts had anticipated, while Costco’s stock dropped by 6.1% after reporting weaker-than-expected quarterly earnings.
Overall, the S&P 500 rose by 31.68 points to 5,770.20, the Dow Jones Industrial Average increased by 222.64 to 42,801.72, and the Nasdaq composite gained 126.97 points to 18,196.22. In international markets, German stocks decreased by 1.8%, erasing some gains from earlier in the week triggered by a significant shift in the country’s debt policy. Other indexes in Europe and Asia also experienced declines.
___Contributions were made by AP Business Writers Matt Ott and Elaine Kurtenbach.
