(Bloomberg) -- Wall Street traders are cautiously adding fuel to the stock rebound, in a high-stakes bet that Corporate America will weather slowing economic growth and tariff-fueled disruptions to earnings.
Investors looked past weak consumer confidence and labor data to send the S&P 500 up 0.6%. The gauge notched its best six-day run since March 2022, rising about 8% in the span. The Nasdaq 100 is close to erasing all of its losses since April 2, when President Donald Trump announced his trade offensive. Treasuries extended their April gains, with 10-year yields dropping below 4.2%. The dollar rose against most major currencies.
Subscribe to the Stock Movers Podcast on Apple, Spotify and other Podcast Platforms.
A cohort of stock bulls are fueling a comeback in equities, even as Trump’s tariff turmoil shows no sign of letting up with the economic toll rising by the day. One theory holds that investors are fearful of missing out on the early phase of the market bounce, mindful of the long history of US rebounds.
Add bets that the Federal Reserve will cut interest rates to prevent a recession, and a risk-on investment case may build.
Yet after cruising along comfortably for most of last year, the world’s largest economy lost altitude at the start of 2025 as consumers tired and the trade deficit ballooned on a tariff-related scramble for imports.
In the latest pivot in Trump’s trade strategy, the president is set to sign an executive order easing the impact of his auto tariffs, preventing duties on foreign-made vehicles from stacking on top of other levies and lessening charges on parts from overseas used to make vehicles in the US.
“Many are still calling for a recession and even lower equity levels, but we think the ‘Trump put’ is real for equities while the ‘Fed put’ is real for the economy,” said Andrew Brenner at NatAlliance Securities. “And while tops and bottoms are hard to recognize as they are happening, we think the worst is behind us.”
In corporate news, Amazon.com Inc. said it will not display the cost of US tariffs on products after the White House blasted the reported move. Apple Inc. wants to build the iPhone in the US, Commerce Secretary Howard Lutnick told CNBC. General Motors Co. and JetBlue Airways Corp. pulled their outlooks. United Parcel Service Inc. expects to cut 20,000 jobs this year.
After the closing bell, Starbucks Corp. reported sales that fell slightly faster than expected. Visa Inc.’s earnings beat estimates. Snap Inc. declined to issue a sales forecast for the current period, saying it’s navigating macroeconomic “headwinds” for its advertising business. Super Micro Computer Inc.’s preliminary results fell short of analysts’ projections.
“Looking ahead, we believe the worst-case scenarios for policy change may be in,” said Lauren Goodwin at New York Life Investments. “But since uncertainty is still high in market-critical areas like business cost and revenue, and since valuations have already improved from recent market bottoms, market volatility is likely to persist.”
At HSBC Holdings Plc, a group of strategists cut their year-end S&P 500 target to 5,600 from 6,700, saying tariffs and weaker-than-expected US economic growth will pressure corporate earnings.
“We expect the market narrative will flip-flop between recession and stagflation until tariff turmoil subsides, the Fed starts easing, and/or inflationary pressures fail to build up,” strategists including Nicole Inui wrote in a note to clients.
Raymond James’ Larry Adam noted that while he’s keeping his S&P 500 target of 5,800 by the end of the year, there’s a long time between here and there.
“In the interim, I would be more cautious because I do think that you’re going to see more tangible evidence show that this economy is slowing,” he said in an interview at Bloomberg headquarters in New York.
A robust earnings season has boosted positioning momentum in US stocks, leaving exposure levels near neutral, according to Citigroup Inc. strategists led by Chris Montagu.
Meantime, hedge-fund managers who’ve been holding fire as tariff headlines whipsawed markets are still reluctant to place any major bets, with one big exception: shorting US stocks.
So-called market conviction, a gauge of hedge funds’ confidence in pursuing a particular investment strategy, is recovering somewhat after swooning to near its lowest in decades, according to data provided by Bob Elliott, a former top executive at Bridgewater Associates Ltd. Positioning across major asset classes — including currencies, bonds and commodities — remains weak after having fallen at the end of March into the bottom 10th percentile relative to levels since 2000.
“On the positive side, while the Trump administration has stirred up volatility, the so-called Trump Put has become more visible, with louder talk of off-ramps and trade deals lately,” said HSBC strategists Alastair Pinder and Dmitriy Leskin. “On the flip side, recession chatter is also getting louder - and though some of it is already reflected in prices, we think it does cap the upside.”
Corporate Highlights:
Honeywell International Inc. raised its full-year guidance for earnings per share, saying it will offset about $500 million in tariff exposure with price changes and other actions to protect its bottom line.
Royal Caribbean Cruises Ltd. raised its profit outlook for the year as cruise demand continues to defy the increasingly dire situation of the wider travel market.
Hilton Worldwide Holdings Inc. lowered its earnings forecast for 2025, as growing uncertainty about the US economy weighs on future travel demand.
Kraft Heinz Co. trimmed its annual sales and profit outlook, citing worsening consumer sentiment and the cost of tariffs.
PayPal Holdings Inc. left its full-year forecast for earnings unchanged even after reporting a stronger first quarter than analysts were expecting, citing “uncertainty in the global macro environment.”
NXP Semiconductors NV sank after the company announced a new chief executive officer as part of its quarterly earnings report and warned that tariff threats have created “a very uncertain environment.”
Spotify Technology SA gave a muted outlook for profit and subscriber growth in the current quarter.
Pfizer Inc. expects to pull off two or three deals totaling as much as $15 billion this year to replenish its pipeline following the failure of its closely watched obesity pill.
Hims & Hers Health Inc. soared after Novo Nordisk A/S said it would sell its popular weight-loss drug Wegovy for a steeply reduced price on several telehealth platforms.
Altria Group Inc. reaffirmed its full-year profit guidance even as the Marlboro maker wrestles with weak cigarette and oral tobacco product sales.
S&P Global Inc. said it expects to bring in less revenue than originally forecast this year, as on-again, off-again tariff policies spur market tumult and cause companies to delay debt sales.
Some of the main moves in markets:
Stocks
The S&P 500 rose 0.6% as of 4 p.m. New York time
The Nasdaq 100 rose 0.6%
The Dow Jones Industrial Average rose 0.7%
The MSCI World Index rose 0.5%
Bloomberg Magnificent 7 Total Return Index rose 0.6%
The Russell 2000 Index rose 0.6%
Currencies
The Bloomberg Dollar Spot Index rose 0.2%
The euro fell 0.3% to $1.1382
The British pound fell 0.3% to $1.3404
The Japanese yen fell 0.2% to 142.32 per dollar
Cryptocurrencies
Bitcoin rose 0.9% to $95,358.61
Ether rose 2.1% to $1,823.72
Bonds
The yield on 10-year Treasuries declined four basis points to 4.17%
Germany’s 10-year yield declined two basis points to 2.50%
Britain’s 10-year yield declined three basis points to 4.48%
Commodities
West Texas Intermediate crude fell 2.9% to $60.28 a barrel
