The S&P 500, Dow, and Nasdaq surged, but trade policy and economic uncertainty keep markets volatile
US stocks surged on Friday, marking their strongest performance in months, but the gains were not enough to prevent the market from closing its fourth consecutive losing week.
According to BNN Bloomberg, this is the longest losing streak since August.
The S&P 500 jumped 2.1 percent, recovering from its first 'correction' since 2023, when it closed more than 10 percent below its record.
The index’s last comparable surge occurred after Donald Trump’s election, when Wall Street focused on the potential benefits of his return to the White House.
The Dow Jones Industrial Average climbed 674 points, or 1.7 percent, while the Nasdaq composite rose 2.6 percent.
Yung-Yu Ma, chief investment officer at BMO Wealth Management, noted that a multi-day 'relief rally' could follow, as investor sentiment tends to fluctuate.
The US stock market has been declining rapidly since reaching a record high less than a month ago.
A key source of uncertainty for Wall Street may be easing as the US Senate took steps to prevent a partial government shutdown.
Although past shutdowns have had a limited impact on financial markets, reducing uncertainty can help stabilize markets amid frequent volatility.
However, significant concerns remain regarding Trump's ongoing trade policies. The focus is on how much economic strain he is willing to impose through tariffs and other measures to achieve his goals.
Trump has stated that he aims to bring manufacturing jobs back to the US, shrink the federal workforce, and implement broader changes.
Stock prices may be nearing an adjustment to reflect the impact of tariffs set to take effect in April.
However, Ma indicated that concerns over how federal spending cuts will affect the economy are “likely to remain for some time.”
US households and businesses have already reported declining confidence due to uncertainty surrounding tariffs and policy changes. This has raised fears of reduced spending, which could slow economic growth.
A preliminary survey from the University of Michigan, released Friday, showed consumer sentiment dropping for the third straight month, driven mainly by concerns about the future rather than present conditions.
Joanne Hsu, director of the survey, stated that “many consumers cited the high level of uncertainty around policy and other economic factors” and that “frequent gyrations in economic policies make it very difficult for consumers to plan for the future, regardless of one’s policy preferences.”
These concerns have led Wall Street to closely watch whether declining consumer confidence is translating into business challenges.
Ulta Beauty shares surged 13.7 percent after reporting higher-than-expected profits for the latest quarter.
While the company’s revenue and profit forecasts fell short of analysts' projections, Chief Financial Officer Paula Oyibo emphasized a cautious approach “as we navigate ongoing consumer uncertainty.”
Analysts suggested the forecasts were better than initially feared.
Gains in Big Tech and artificial-intelligence stocks also supported the market. These stocks, which had been under pressure due to concerns over overvaluation, saw a rebound.
Nvidia rose 5.3 percent, reducing its 2025 loss to below 10 percent, while Apple climbed 1.8 percent, trimming what had been its worst weekly decline since the 2020 COVID crash.
By market close, the S&P 500 had risen 117.42 points to 5,638.94. The Dow Jones Industrial Average increased 674.62 points to 41,488.19, and the Nasdaq composite jumped 451.07 points to 17,754.09.
Internationally, stock indexes advanced across Europe and Asia. Hong Kong’s market rose 2.1 percent, and Shanghai’s gained 1.8 percent following new directives from China’s National Financial Regulatory Administration.
The agency urged financial institutions to expand consumer finance, promote credit card use, assist struggling borrowers, and improve lending transparency.
Economists believe China needs to boost consumer spending to revive its economy, though many advocate for deeper structural reforms.
In the bond market, Treasury yields rebounded after recent sharp declines. The 10-year Treasury yield climbed to 4.31 percent from 4.27 percent on Thursday, up from 4.16 percent earlier in the week.
Yields have been volatile since January, when the 10-year yield approached 4.80 percent. Economic concerns have driven yields lower, while inflation fears have pushed them higher.
