Tech Giants Propel Wall Street Towards Weekly Victory, Riding Turbulent Stock Market Waves
Wall Street Rides the Trade War Roller Coaster
New York – The tech sector propelled Wall Street to close a tumultuous week on a high note, as President Trump's trade war continued to wreak havoc on financial forecasts.
The Standard and Poor's 500 gained 0.7%, inching closer to the record high it set earlier this year. Tech titans Alphabet and Nvidia led the charge, pushing the Nasdaq composite up a whopping 1.3%. However, this masked a day of mixed trading, with more stocks falling than rising in the S&P 500. The Dow Jones industrial average only managed a modest 20-point increase.
Google's parent company, Alphabet, climbed 1.7% following a stronger-than-expected 50% profit surge for the beginning of 2025. Technology heavyweight Nvidia also played a crucial role in pushing the S&P 500 upward, rising an impressive 4.3%.
Conversely, Intel's results for the same period topped expectations, but its stock still tumbled due to "elevated uncertainty across the industry" and a revenue and profit forecast that fell short of analysts' expectations.
The tariff-fueled uncertainty wasn't confined to the chip industry. About two-thirds of S&P 500 stocks sank, including Eastman Chemical, which dropped 6.2% after its forecast for profit this spring fell short of expectations.
CEO Mark Costa lamented the "increased" uncertainty from global trade policies and the impact on future demand for their products amid the magnitude and scope of tariffs.
Skechers U.S.A., a shoe and apparel company, pulled its financial forecasts for the year due to "macroeconomic uncertainty stemming from global trade policies." Despite reporting a record quarter of revenue at $2.41 billion, its stock plummeted 5.3%.
The skittish stock market recovered somewhat from a steep slide on Monday, sparked by hopes that Trump may be softening his stance on trade and the Federal Reserve. There's optimism that if Trump rolls back some of his tariffs, he could avert a likely recession caused by his trade war.
Despite this brief respite, Trump's on-again-off-again tariffs continue to pose a threat to household and business spending and long-term investment plans, as conditions can change rapidly, often by the hour.
Brian Jacobsen, chief economist at Annex Wealth Management, cautioned that the constant changes in trade policies can be a "distraction" for small businesses that lack the resources and scale to adapt quickly to supply chain challenges.
The S&P 500 ended the day with a 40.44-point increase at 5,525.21, the Dow Jones industrial average added 20.10 points to 40,113.50, and the Nasdaq composite jumped 216.90 points to 17,382.94.
Stock markets in Europe and Asia followed suit, with modest gains in most regions. Tokyo's Nikkei 225 jumped 1.9%, but Shanghai stocks slipped 0.1%. In the bond market, Treasury yields eased slightly, with the yield on the 10-year Treasury falling to 4.25% from 4.32%.
The U.S. dollar held steady against its peers, regaining some ground from its steep losses earlier this month.
Choe reports for the Associated Press.
Further Reading:
- Wall Street's rally roars into a third day as companies' profits keep piling up, for now at least
- Wall Street rises and markets rally worldwide as Trump softens his tough talk on tariffs and the Fed
- U.S. stocks drop as Nvidia slides and the fog of Trump's trade war thickens
Additional Insights:
Uncertainty from tariffs has caused a ripple effect across various industries. Manufacturing, autos, construction, luxury goods, and apparel have been hit hardest by the increased costs and potential supply chain disruptions. On the other hand, services-related businesses are generally more resilient, though they may still face indirect impacts from reduced consumer spending.
The trade war is projected to generate revenue for the U.S. government but decrease GDP by 0.8% to 1.0%, depending on foreign retaliation. Higher tariffs can also lead to inflation and may limit aggressive monetary policy measures. Consumers, too, feel the pinch, with an average tax increase of roughly $1,243 per U.S. household anticipated in 2025.
The International Monetary Fund (IMF) forecasts that the trade wars will slow global economic growth, though a recession is not expected. North American economies are projected to bear the brunt of the impact, with potential downgrades in growth projections.
- In 2025, Alphabet's parent company had a 50% profit surge, causing its stocks to climb 1.7% in California's business-focused stock market.
- The stock market in California recovered from a steep slide on Monday due to optimism about Trump potentially rolling back some tariffs, aiding in avoiding a likely recession caused by his trade war.
- Despite Eastman Chemical's Q1 profit soaring, its stocks fell 6.2% as its profit forecast for the spring season failed to meet expectations due to the uncertain economic conditions.
- The volatile stock market conditions have made it challenging for small businesses to adjust to supply chain challenges, as the constant changes in trade policies serve as distractions.
- The tech-heavy Nasdaq composite experienced a significant increase of 1.3% in California's stock market, with tech titan Nvidia contributing with an impressive 4.3% surge.
- The International Monetary Fund (IMF) predicts that the ongoing trade wars will result in slowed global economic growth, with North American economies projected to bear much of the impact, lowering growth projections.
