Delhi, 3 May (H.S.): Stocks continued their upward trend buoyed by favorable jobs data and indications of a possible easing in U.S.-China tensions. The Dow, S&P 500, and Nasdaq Composite all experienced gains of 1.3% or more. The S&P 500 closed up 1.5%, marking its longest winning streak since 2004 with nine consecutive sessions of gains.
A midday surge in major indexes followed a report from The Wall Street Journal suggesting that China is exploring ways to address U.S. concerns regarding its involvement in the fentanyl trade, potentially signaling a thaw in relations. The nonfarm payrolls data exceeded expectations, showing the U.S. added 177,000 jobs in April, while unemployment remained steady at 4.2%.
Market optimism was further fueled by comments from China, indicating a willingness to consider trade talks contingent upon the U.S. demonstrating sincerity by canceling unilateral tariffs. Additionally, the decision by President Trump not to dismiss Fed Chair Jerome Powell has reassured investors of stability, prompting stocks to rise.
Investor behavior also played a role, as significant selling by major investors created a scenario where they now feel compelled to reinvest in order to avoid underperformance relative to their peers. Overall, these factors combined to foster a positive market outlook.
Investor sentiment remains cautious regarding Big Tech following disappointing earnings from Apple and Amazon. Although Amazon forecasts a solid quarter, its lower predictions fall short of analyst expectations. Apple indicated that ongoing tariff plans could increase costs by $900 million this quarter, potentially rising further, resulting in a 3.7% drop in its shares. Meanwhile, Block, the parent company of Cash App, reported a significant shift in consumer spending, noting reductions in non-essential expenditures such as travel and media. Consequently, Block’s shares plummeted 20% after missing profit forecasts and lowering its annual outlook. RSM chief economist Joe Brusuelas highlighted concerns over potential tariff-induced price increases, mentioning his personal stocking up on essentials as a precaution. He indicated that while there’s some optimism due to Trump’s recent tariff de-escalation, the risk of renewed tariffs remains looming. The financial markets are reacting to any hopes of trade conflict resolution, with gains at risk should Trump change course again. In recent trading activity, U.S. indexes saw advances, with the Russell 2000 index of small companies gaining 2.3%, outperforming larger indexes. Global stocks also rallied, with significant gains seen in the U.K., Hong Kong, Japan, and Europe. The WSJ Dollar Index slipped after a three-day rise, while the 10-year Treasury yield climbed to 4.317%. Gold futures rebounded after a selloff, trading above $3,260 per troy ounce.
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Hindusthan Samachar / Jun Sarkar
