Weekly Recap Fundamental Analysis: U.S. Indices Rebound on Hopes of Trade Agreements
After the fluctuation we saw at the beginning of April, U.S. Equities rebounded this week, supported by easing trade tensions between the U.S. and China, and better-than-expected tech earnings.
- S&P 500: Gained 4.02% to reach 5,484.77.
- Dow Jones Industrial Average: Rose 1.9% to 40,055.40.
- Nasdaq Composite: Jumped 5.33 % to 19,255.75
These gains were driven by Alphabet’s impressive Q1 earnings, which alleviated investor concerns about its AI investments. Stock of Alphabet rose 5.6% in premarket trading.
In addition to that, signs of China’s tariff relief contributed to market optimism. China granted exclusions for some U.S. imports from its 125% tariffs and sought feedback from companies on essential goods that would require waiving tariffs.
The VIX (Volatility Index) dropped to its lowest point since early April, which signals improved market conditions and stability.
However, analysts still caution that ongoing uncertainties in the U.S. Trade policies and economic outlook are still a concern for traders..
Mixed Reactions Persist Amid Trade Developments
Global markets experienced varied movements this week:
- Europe: Indices such as the CAC 40, DAX, and FTSE 100 recorded modest gains, supported by positive retail data in the UK.
- Asia: The Nikkei 225 rose 1.9%, the Kospi gained 0.9%, and Taiwan’s Taiex jumped 2%. However, India’s Sensex fell 0.4% due to geopolitical tensions.
In China, tech stocks like Lenovo and Baidu rose after U.S. chip exemptions.
Economic Data of This Week: Retail Sales and Fed Outlook
- U.S. Retail Sales: Rose 1.4% in March from February, marking the largest monthly increase in over two years. A noticeable contributor was a 5.3% jump in sales at motor vehicle and parts dealers.
- Federal Reserve: Chairman Jerome Powell indicated the central bank is comfortable waiting for “greater clarity” before changing monetary policy, referring to the Trump administration’s evolving policy changes and their uncertain effects on the economy.
