Jamie Spencer
Wall Street closed higher on Friday, marking a strong finish to the week, with investors digesting earnings reports and looking for signs of easing tensions in the U.S.-China trade dispute. The S&P 500 and Nasdaq saw gains, driven by the “magnificent seven” group of artificial intelligence-related megacap stocks, while the Dow Jones Industrial Average saw more muted performance.
Small Cap Surge and Trade War Easing
The small-cap Russell 2000 saw its largest weekly percentage gain since November, reflecting optimism among investors. Meanwhile, Beijing announced exemptions on some U.S. imports from its 125% tariffs, but denied President Trump’s claims of successful negotiations. This followed recent de-escalatory statements from Treasury Secretary Scott Bessent, signaling a potential reduction in trade war tensions between the world’s two largest economies. “We’re looking at a nice finish to what was a pretty strong week,” said Greg Bassuk, CEO of AXS Investments in New York. The market rebound followed a strong sell-off earlier in the week, driven by optimism about trade de-escalation.
Strong Earnings Reports
As the first-quarter earnings season intensifies, 179 of the S&P 500 companies have reported their results. Of those, 73% have surpassed expectations. Analysts now estimate S&P 500 earnings growth for Q1 at 9.7%, up from the 8.0% forecast on April 1. While investors were focused on earnings results, much of the attention shifted toward forward guidance, with many companies adjusting their projections due to economic uncertainties and a slowdown in consumer spending.
Consumer Sentiment and Inflation Expectations
The University of Michigan’s final consumer sentiment index for April was upwardly revised but still marked the lowest level since July 2022, with inflation expectations remaining elevated. These sentiments weigh on consumer behavior, which is closely tied to overall economic growth and market performance.
Sector Performance and Notable Stock Moves
On the stock front, Alphabet (GOOGL) saw its shares rise 1.7% after reporting a 28% jump in Google Cloud revenue, reaffirming the value of its AI investments. However, Intel (INTC) disappointed with weak revenue and profit forecasts, sending its stock down 6.7%. Oilfield services provider SLB (SLB) also dipped 1.2% after missing first-quarter profit estimates and warning of potential industry shifts due to economic uncertainty and tariffs.
On the positive side, Charter Communications (CHTR) surged 11.4% after beating revenue estimates and exceeding subscriber growth expectations. Overall, advancing stocks outpaced decliners with a 1.33-to-1 ratio on the NYSE, and 54 new highs were recorded on the exchange.
Market Volume and Future Outlook
Trading volume on U.S. exchanges reached 14.3 billion shares, below the 19.1 billion average of the last 20 trading days. With earnings season continuing, investors will be closely monitoring the economic landscape, particularly the impact of U.S.-China trade relations and inflation expectations on future market movements.
