S&P 500 notches longest winning run since January
A solid Wall Street week ended with gains for stocks as a rally in the market’s most-influential group offset conflicting signals about progress in President Donald Trump’s trade negotiations.
The surge in megacaps sent the S&P 500 above 5,500, with the gauge notching its longest advance since January. Tesla Inc. jumped 9.8% while Alphabet Inc. climbed on solid results. Equities briefly lost steam as Trump suggested another delay to reciprocal tariffs was unlikely, and he wouldn’t drop tariffs on China without “something substantial” in return. Bonds and the dollar rose.
“Markets have staged an impressive recovery,” said Mark Hackett at Nationwide. “While fears of a 2008- or 2020-style crisis are fading, the road back to record highs won’t be easy. Markets are showing resilience, but still face the same persistent challenges, including tariff uncertainty and signs of an economic slowdown.”
Worries about the economic fallout from tariffs drove U.S. consumer sentiment to one of its lowest readings on record, while long-term inflation expectations climbed to the highest since 1991.
As investors weighed mixed signs on whether the trade war between the world’s two largest economies is de-escalating, Bloomberg News reported China is considering suspending its 125% tariff on some U.S. imports.
Trump told Time magazine he expects to wrap up trade deals with U.S. partners looking for lower tariffs in three to four weeks. But the president gave confusing signals about the status of talks with China, even as Beijing has denied negotiations are taking place.
“We are currently in tariff purgatory,” said Joachim Klement, strategist at Panmure Liberum. “There is no fundamental change to the outlook, so markets latch on to noise and get constantly whipsawed by the ever-changing utterances of Donald Trump and his cabinet.
While recent data indicate U.S. spending is holding up so far, the outlook for this year is less promising. With companies poised to pass on tariff and commodity costs to shoppers, the hikes could further slow consumer demand and juice inflation.
As profit margins remain close to record levels, Corporate America has some room to absorb costs from higher tariffs. However, the track record of S&P 500 companies over the past two decades suggests their ability to withstand additional levies is fragile, at least by one measure.
Nearly all of the margin growth eked out from corporate sales on the gauge since 2004 has come from the booming technology sector, according to Bloomberg Intelligence. Removing the group, profitability barely rose.
“The tariff-induced slowdown in economic activity, as well as the higher costs, will crimp corporate profit growth,” said David Lefkowitz at UBS Global Wealth Management. “But the economy should rebound next year as businesses and consumers adjust to the tariffs, with an assist from Federal Reserve rate cuts and certainty on tax policy.”
Bank of America Corp. strategists led by Michael Hartnett said investors should sell into rallies in U.S. stocks and the dollar.
The greenback is in the midst of a longer-term depreciation while the shift away from U.S. assets has further to go, they noted. The trend would continue until the Federal Reserve starts cutting rates, the U.S. reaches a trade deal with China and consumer spending stays resilient.
Foreign investors have sold $63 billion of U.S. equities since the start of March, Goldman Sachs Group Inc. strategists estimate, noting that the data from high-frequency fund flows suggest that European investors have been driving the selling, while other regions have continued to buy U.S. stocks.
Forecasters anticipate the trade war will hit economic growth this year and next as tariffs push prices higher and put a dent in consumer spending.
The U.S. economy is set to expand 1.4% in 2025 and 1.5% in 2026, according to the latest Bloomberg survey of economists, compared with 2% and 1.9% in last month’s poll. The median respondent now sees a 45% chance of a downturn in the next 12 months, up from 30% in March.
Corporate highlights:
▪ Intel Corp. Chief Executive Officer Lip-Bu Tan gave investors a stark diagnosis of the chipmaker’s problems this week, along with the sense that it will take a while to fix them.
▪ Apple Inc. is seeking to import most of the iPhones it sells in the U.S. from India by the end of next year, accelerating a shift beyond China to mitigate risks related to tariffs and geopolitical tensions.
▪ T-Mobile U.S. Inc. reported fewer new wireless phone subscribers than analysts expected in the first quarter.
▪ Colgate-Palmolive Co. cut its growth and profit outlooks as tariffs are expected to add $200 million in costs this year.
▪ AbbVie Inc. raised its profit outlook for the year on better-than-expected sales from newer autoimmune treatments.
▪ Centene Corp. raised its revenue guidance for the year because more people enrolled in its health insurance plans than it expected, a welcome sign for investors after the largest in the sector, UnitedHealth Group Inc. cut its forecast earlier this month.
Some of the main moves in markets:
Stocks: The S&P 500 rose 0.7%, the Nasdaq 100 rose 1.1%, with both the Dow Jones Industrial Average and Russell 2000 Index little changed.
Currencies: The Bloomberg Dollar Spot Index rose 0.2%. The euro fell 0.2% to $1.1363, the British pound fell 0.2% to $1.3320 and the Japanese yen fell 0.7% to 143.64 per dollar.
Cryptocurrencies: Bitcoin rose 2.1% to $95,404.61 and Ether rose 2.3% to $1,803.71.
Bonds: The yield on 10-year Treasuries declined six basis points to 4.26%.
Commodities: West Texas Intermediate crude rose 0.6% to $63.19 a barrel. Spot gold fell 1.3% to $3,305.25 an ounce.
With assistance from John Viljoen and Kit Rees.
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This story was originally published April 25, 2025 at 12:23 PM