S&P 500 Rally Fades on Tariff Angst as Bonds Climb: Markets Wrap

(Bloomberg) — Wall Street traders cheering solid results from Nvidia Corp. had to face the harsh reality of slowing economic data and legal uncertainties around Donald Trump’s trade war. The president told Federal Reserve Chair Jerome Powell he’s making a mistake for not cutting rates.

The S&P 500 pared most of an advance that earlier approached 1%. A federal appeals court offered Trump a temporary reprieve from a ruling threatening to throw out the bulk of his tariff agenda. Treasuries rose on bets the Fed will slash rates twice this year and after a solid $44 billion sale of seven-year notes. The dollar fell.

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“We expect further market volatility ahead as headlines on both trade and fiscal policy emerge,” said Ulrike Hoffmann-Burchardi at UBS Global Wealth Management. “We still expect US equities to rise over the next 12 months, but near-term gains this year are likely to be more limited.”

The US economy shrank at the start of the year, restrained by weaker consumer spending and an even bigger impact from trade than initially reported. Pending sales of previously owned homes last month fell by the most since September 2022, while a rise in recurring jobless claims signaled higher unemployment.

The S&P 500 rose 0.4%. The Nasdaq 100 gained 0.2%. The Dow Jones Industrial Average added 0.3%.

Nvidia led gains in megacaps, up over 3%. Salesforce Inc. reported signs of traction in its new AI products, but that wasn’t enough to ease investor anxieties over a long trend of slowing revenue growth. United Airlines Holdings Inc. said Newark disruptions will cut into profits.

The yield on 10-year Treasuries fell five basis points to 4.43%. A dollar gauge lost 0.4%.

Corporate Highlights:

• Best Buy Co. reduced its sales and profit outlook as the electronics retailer grapples with tariffs on imports from China, its top source of goods.
• Wells Fargo & Co. resolved another regulatory punishment, the seventh this year, as the Office of the Comptroller of the Currency terminated its 2015 agreements relating to the company’s previously held financial subsidiaries.
• Meta Platforms Inc. is partnering with defense contractor Anduril Industries Inc. to develop new products for the US military, including an artificial intelligence-powered helmet with virtual and augmented reality features.
• Synopsys Inc., a top maker of chip-design software, suspended its financial guidance for the current quarter and fiscal year after receiving word from the US government about new restrictions on exports to China.
• HP Inc.’s profit outlook fell short of estimates and it cut the annual earnings forecast, pointing toward a weaker economy and continuing costs from US tariffs on goods from China.
• Walt Disney Co. is expanding a program of perks for subscribers to its flagship Disney+ streaming service and adding one for Hulu customers.
• Kohl’s Corp. reported better-than-expected comparable sales, a positive sign amid a tumultuous run of events for the retailer.
• Foot Locker Inc.’s sales slump persisted in the latest quarter, a potential headache for Dick’s Sporting Goods Inc. as it prepares to acquire the struggling sneaker chain.

Some of the main moves in markets:

Stocks

• The S&P 500 rose 0.4% as of 4 p.m. New York time
• The Nasdaq 100 rose 0.2%
• The Dow Jones Industrial Average rose 0.3%
• The MSCI World Index rose 0.5%
• Bloomberg Magnificent 7 Total Return Index rose 0.6%
• The Russell 2000 Index rose 0.3%

Currencies

• The Bloomberg Dollar Spot Index fell 0.4%
• The euro rose 0.7% to $1.1367
• The British pound rose 0.2% to $1.3494
• The Japanese yen rose 0.5% to 144.14 per dollar

Cryptocurrencies

• Bitcoin fell 1.5% to $105,764.73
• Ether rose 0.6% to $2,651.93

Bonds

• The yield on 10-year Treasuries declined five basis points to 4.43%
• Germany’s 10-year yield declined five basis points to 2.51%
• Britain’s 10-year yield declined eight basis points to 4.65%

Commodities

• West Texas Intermediate crude fell 1.5% to $60.91 a barrel
• Spot gold rose 0.9% to $3,316.34 an ounce

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