U.S. stocks showed little movement on Friday as Wall Street closed a notably calm week. The S&P 500 rose by 0.2% in late trading, positioning itself for a slight weekly drop of just 0.2%. This marks the first week in seven where the S&P 500 moved by less than 1.5%, following previous volatility triggered by fears over President Trump’s trade war and hopes for tariff reductions. Investors are now focused on the upcoming U.S.-China trade talks, expected to take place over the weekend.
Market Overview:
As trading wraps up on Friday, the Dow Jones Industrial Average is down by 17 points, or less than 0.1%, with less than an hour left in the session. The Nasdaq composite has gained 0.2%, with both indexes remaining close to flat for the week.
The key event of the week is scheduled for Saturday, when senior U.S. and Chinese officials will meet in Switzerland. This is the first official discussion since President Trump initiated a trade war with China. Investors are concerned that a potential recession could occur if the U.S. doesn’t reach trade deals that adequately reduce tariffs.
Trump’s Tariff Reduction Proposal:
On Friday, President Trump briefly caused a stir in the markets by suggesting that tariffs on Chinese imports might be reduced from 145% to 80%. While this would represent a reduction, it would still be significantly high. The comment led to an immediate dip in U.S. stock futures, but the market quickly calmed as investors await more concrete information following the U.S.-China talks in Switzerland.
Trade Deals and Global Trade Relations:
In addition to the upcoming trade talks with China, President Trump highlighted other potential trade deals. He pointed to ongoing negotiations with various countries, including a new agreement with the United Kingdom announced the previous day. This has fueled optimism for more global trade agreements, which could further affect the markets.
Corporate Earnings Impacting Markets:
The earnings season continues, and several companies have posted results that impacted stock prices. Lyft shares surged by 27.3% after the ride-hailing company reported stronger-than-expected earnings for the latest quarter. Lyft also noted record weekly ridership levels in March, which contributed to its stock price increase.
Taiwan Semiconductor Manufacturing Company (TSMC), the world’s leading chipmaker, saw its stock rise by 1.2% following an impressive earnings report. TSMC’s April revenue jumped by 48.1% year-over-year, indicating strong demand for semiconductors.
Mixed Results in the Travel Sector:
Despite some positive earnings reports, several travel-related companies faced challenges. Expedia’s stock fell by 7.4%, despite reporting stronger-than-expected profits. The travel platform highlighted weaker-than-expected demand, particularly citing a nearly 30% drop in bookings from Canada to the U.S. Other travel-related companies, including Hilton and Airbnb, have also observed softening demand in their recent earnings reports, signaling potential difficulties in the travel industry.
Sweetgreen’s Struggles and Other Corporate Performance:
Sweetgreen, a fast-casual salad chain, saw its stock drop by 17.9% after reporting a larger-than-expected loss for the most recent quarter. The company also provided a full-year revenue forecast that fell short of analysts’ expectations. These factors led to investor concerns about the company’s future performance.
International Market Developments:
International markets experienced mixed results. In Hong Kong, stocks rose by 0.4%, while Shanghai saw a slight dip of 0.3%. China reported that its exports grew by 8.1% year-over-year in April, surpassing expectations. However, exports to the U.S. dropped by more than 20%, largely due to the impact of President Trump’s tariffs. As the world’s largest exporter, China’s trade relations with the U.S. remain a key focus for investors.
Bond Market Update:
In the bond market, the yield on the 10-year U.S. Treasury bond remained steady at 4.37%, the same level it closed at on Thursday. Bond yields provide insights into investor sentiment, with changes reflecting expectations for economic growth and interest rates.
