Markets rebound sharply while tech stocks and economic data drive optimism
U.S. stocks rallied on Thursday, pushing the S&P 500 within a whisker of a new record. The index climbed 0.8% to 6,141.02, just 0.05% below its February all-time closing high, buoyed by a mix of upbeat earnings, improving economic indicators, and fading fears over President Donald Trump’s tariffs.
The Dow Jones Industrial Average surged 404 points, or 0.9%, to 43,386.84, while the Nasdaq Composite gained 1%, closing at 20,167.91. The gains marked a strong rebound from earlier spring lows, when tariff-related uncertainty sent stocks tumbling nearly 20% below previous highs.
Corporate earnings and AI stocks keep momentum going
Spice maker McCormick led market gains, rising 5.3% after reporting better-than-expected earnings and issuing a strong profit outlook. The company said it is taking proactive steps to offset higher costs stemming from tariffs.
Big tech continued its dominance. Nvidia rose 0.5%, extending its incredible 61% surge since April 8. The AI chip giant remains the most valuable company in the U.S. market. Super Micro Computer, another AI favorite, gained 5.7%, while Micron Technology dipped 1% despite beating quarterly expectations and forecasting strong demand for AI-related memory products.
Economic data shows resilience amid trade tensions
Investors shrugged off a downward revision to first-quarter GDP, which showed the economy contracting by 0.5% instead of 0.2%, due largely to a spike in imports. Economists argue this was a one-off effect as firms raced to beat anticipated tariffs and expect stronger growth in Q2.
Meanwhile, new data showed durable goods orders rose more than expected and jobless claims dropped, suggesting solid demand and a stable labor market. These signs of economic resilience helped calm fears that trade policies could trigger a downturn.
Bond yields dip as Fed uncertainty lingers
The yield on the 10-year Treasury slipped to 4.24% from 4.29%, while the 2-year yield dipped to 3.71%. Investors were rattled by reports that Trump may soon name a replacement for Fed Chair Jerome Powell, raising concerns about the central bank’s independence and inflation-fighting credibility.
“Yields fell, the dollar weakened, and break evens rose, all suggesting that a puppet of the White House in the seat of the Chair could be bad for inflation,” said Brian Jacobsen of Annex Wealth Management. However, he noted that rate decisions ultimately rest with the full Federal Open Market Committee.
Global markets mixed
Overseas, Japan’s Nikkei 225 rose 1.6%, while South Korea’s Kospi fell 0.9%. European markets ended the day mixed as investors continued weighing the global economic implications of U.S. trade policy and monetary shifts.
