Stocks faced a setback on Friday, ending a two-week upswing as uncertainty loomed over upcoming trade negotiations with China, despite President Trump’s comments hinting at potential tariff reductions. This cautious sentiment drove investors toward safer assets, leading to a notable rise in gold prices as the market adopted a more risk-averse stance.
The Dow Jones Industrial Average closed with a 0.3% decline, while the S&P 500 also dipped, marking the end of their brief two-day rallies. The Nasdaq managed to secure a slight gain, showcasing some resilience amid broader market fluctuations. Key technical levels were tested, with the Dow approaching its 10-week moving average, while the other indexes remained above this crucial benchmark yet faced resistance around their 40-week averages.
In the small-cap sector, the Russell 2000 minimized its losses to 0.2% but found itself positioned between its 10-week and 40-week moving averages, indicating a struggle for momentum. Trading volume reflected mixed sentiment; it was lower on the New York Stock Exchange but higher on the Nasdaq compared to the prior day. The market breadth improved slightly, with the NYSE finishing with more advancers than decliners, though the Nasdaq showed the opposite trend.
Gold’s rise was spurred by ongoing uncertainties tied to trade discussions, overshadowing previous optimism related to a 90-day tariff pause initiated in early April. In notable stock movements, Ibex surged over 20%, breaking out from a double-bottom base, while Penumbra also performed well, entering a buy zone.
Data from The Wall Street Journal highlighted a stark 21% drop in Chinese exports to the U.S. during April, a drastic shift from a 9.1% increase the previous month, further fueling concerns about economic ramifications from the ongoing trade tensions. U.S. Treasury Secretary Scott Bessent and Trade Secretary Jamieson Greer were slated to meet with Chinese officials over the weekend to discuss these issues.
Amid these developments, President Trump shared his perspective on tariffs, suggesting that an 80% levy on imports from China “seems right,” compounded by recent inflation warnings from Federal Reserve officials, signaling that rising tariffs may contribute to increasing price levels. The Fed is currently in a holding pattern, maintaining rates while closely observing inflation trends.
In individual stock news, Tesla saw a notable surge of 5% as it gears up for a much-anticipated robotaxi launch in Austin, Texas. The company successfully cleared its 200-day moving average, marking a significant recovery from earlier lows this year.
Among sectors, consumer discretionary, real estate, and energy showed positive movement, while communication services and consumer staples encountered declines. In company highlights, Cloudflare experienced over 5% growth following earnings that met expectations, while Lyft stock jumped more than 20% after exceeding earnings estimates and announcing robust booking figures.
In the cryptocurrency realm, Coinbase faced a slight decline despite reporting a 24% increase in sales, revealing the volatility that characterizes this sector.
As the market prepares for potential shifts in economic policies and trade relationships, investors are left to navigate a landscape filled with both challenges and opportunities.
