An IMGW News Report
Wall Street appears to have rediscovered its appetite for risk. The S&P 500 surged to complete its longest winning streak in two decades – nine consecutive sessions – buoyed by unexpectedly robust US jobs data and a softening stance from both Washington and Beijing on trade.
Friday’s market crescendo saw the Dow close up 564 points (1.39%), the Nasdaq jump 1.51%, and the S&P 500 climb 1.47%, marking its most enduring rally since 2004. Notably, this flurry of optimism has erased losses incurred since President Trump reignited tariff threats at the start of April.
“A 10th straight gain on Monday would enter historical territory, but investors – now oscillating between cautious optimism and lingering dread – know better than to trust the mood for long”
The catalyst? A surprisingly strong US labour market. April payroll data revealed 177,000 new jobs – well ahead of consensus estimates—prompting a sigh of relief among investors wary of recession signals. Chris Zaccarelli of Northlight Asset Management noted the news gave markets “room to breathe,” extending the ‘buy-the-dip’ narrative – at least temporarily.
Trade signals also turned less antagonistic. Chinese officials hinted at a willingness to engage in dialogue over tariffs and even broached US concerns about fentanyl exports. Trump’s self-imposed 90-day tariff pause – excluding China – has given the market an opportunity to price in hope over hostility. Yet, as ever, policy remains volatile, with Trump taking to social media on Friday to demand interest rate cuts from the Federal Reserve, despite cooling inflation.
Tech stocks proved another source of momentum. Meta and Microsoft delivered earnings that reinforced investor faith in AI’s commercial promise. The Nasdaq, laden with AI darlings, bounced back from April’s losses. Apple, however, faltered, warning that tariffs could cost it $900 million in Q2—underscoring the market’s fragile undercurrent.
Despite the rally, structural questions remain. US GDP contracted last quarter, ADP figures suggest a slowdown in private hiring, and the CNN Fear & Greed Index remains mired in “fear.” Barclays and Goldman Sachs have deferred expectations for Fed rate cuts to July.
As ever with markets, momentum may be more sentiment than substance. A 10th straight gain on Monday would enter historical territory, but investors—now oscillating between cautious optimism and lingering dread – know better than to trust the mood for long.
