Wall St Soars as Fed Comments Calm Market Whirlwind

By Stephen Culp

NEW YORK () – Wall Street saw notable increases on Friday as major banks launched the first-quarter earnings period, and investors concluded a volatile week marked by significant fluctuations due to the uncertainties surrounding U.S. President Donald Trump’s multifaceted trade war.

The three primary US indices concluded the day with notable gains following statements from Boston Federal Reserve Chairman Susan Collins indicating that the Fed stands ready to support financial markets if necessary.

Each of the three indices showed increases compared to their closing values last Friday. Throughout the week, stock prices fluctuated significantly due to a temporary exemption from tariffs on European products and an escalating series of retaliatory measures in the ongoing trade dispute between the U.S. and China. A key indicator of this turbulence was the gap between the highest and lowest points reached within the week for the S&P500, which marked the largest such range since late March 2020—when many countries imposed lockdowns as part of pandemic control efforts.

The S&P 500 and the Dow saw their highest weekly percentage increases since November 2023, whereas the Nasdaq recorded its most substantial weekly percentage rise since November 2022.

"investors are currently caught in this struggle searching for indications that the uncertainty which has been troubling the markets might ease up," stated Greg Bassuk, CEO of AXS Investments based in New York.

Bassuk further explained, 'Ambiguity and unpredictability have become the latest story for investors.' He continued, 'Conditions are ripe for increased turbulence in the future, and this week’s turbulent market activity might merely hint at what we can expect down the line.'

In response to President Trump’s increase in tariffs effectively reaching 145%, Beijing hit back. This trade conflict has led to significant fluctuations in intra-day stock markets and pushed consumer inflation expectations to their highest point since 1981.

The first quarter's reporting period began robustly. JPMorgan Chase, Morgan Stanley, and Wells Fargo all posted higher earnings than anticipated; however, concerns over an impending economic downturn caused by trade conflicts tempered excitement within the industry.

Analysts now anticipate an aggregated earnings growth rate of 8.0% for the S&P 500 companies during the initial quarter of this year, which is more conservative compared to the earlier forecasted growth of 12.2%, as per LSEG information.

New economic figures provided additional proof that inflation is subsiding, as indicated by an unexpected 0.4% drop in the Labor Department’s Producer Price Index for last month.

In contrast, another report revealed a decline in consumer sentiment. Expectations for inflation over the next year surged to 6.7%, marking the highest point since 1981.

Along with Collins’ assurances, John Williams, president of the New York Federal Reserve, stated that the U.S. economy is not heading into a phase characterized by both high inflation and slow economic growth. He also mentioned that the U.S. Federal Reserve will take action to prevent what’s known as “ stagflation.”

Each of the 11 key segments within the S&P 500 was previously showing gains, with industries related to materials and technology experiencing the highest increases in percentages.

The Dow Jones IndustrialAverage climbed 619.05 points, which is an increase of 1.56% to reach 40,212.71. The S&P 500 advanced by 95.31 points, marking a gain of 1.81% up to 5,363.36. Additionally, the Nasdaq Composite jumped by 337.15 points, reflecting a rise of 2.06% to stand at 16,724.46.

In a note to clients, Citi said it now expects the S&P 500 to reach 5,800 by year-end, down from an earlier target of 6,500. Citi cited tariffs and signs of a slowing economy.

Rising stocks exceeded falling ones by a ratio of 2.47 to 1 on the New York Stock Exchange. Additionally, there were 60 new highs and 341 new lows recorded on the same exchange.

On the Nasdaq, 2,948 stocks advanced while 1,467 declined, resulting in an advance-decline ratio of 2.01 to 1.

The S&P 500 saw one fresh 52-week high and five new lows, whereas the Nasdaq Composite noted 21 new peaks but had 147 new troughs.

The volume on U.S. exchanges reached 19.19 billion shares, as opposed to the 18.74 billion share average observed during the complete sessions of the past 20 trading days.

(Reported by Stephen Culp; Extra reporting provided by Shashwat Chauhan and Purvi Agarwal; Edited by David Gregorio)