U.S. Markets Tread Cautiously Amid Trade Uncertainty
U.S. equity markets closed largely unchanged on Friday, reflecting investor caution ahead of key U.S.-China trade discussions in Switzerland. The Dow Jones Industrial Average declined 119.07 points, or 0.29%, ending at 41,249.38, while the S&P 500 lost 4.03 points, or 0.07%, to settle at 5,659.91. The Nasdaq Composite edged up just 0.78 points to 17,928.92, closing essentially flat.
Market participants remained watchful after former President Donald Trump reiterated his hardline stance on China, suggesting a new 80% tariff on Chinese goods, in contrast to the already imposed 145% average levy. His comments, delivered ahead of the weekend negotiations, underscored persistent volatility tied to global trade policy.
Highlights:
Dow: -119.07 pts (↓ 0.29%) at 41,249.38
S&P 500: -4.03 pts (↓ 0.07%) at 5,659.91
Nasdaq: +0.78 pts (flat) at 17,928.92
Weekly losses: S&P 500 (-0.47%), Nasdaq (-0.27%), Dow (-0.16%)
Investors Eye Swiss Trade Talks as Tariff Rhetoric Intensifies
President Trump’s remarks have increased the stakes ahead of U.S.-China trade talks in Switzerland, with market sentiment largely hinged on potential de-escalation or reinforcement of the ongoing tariff war. Economists, including Russell Price of Ameriprise, suggested the meeting could either provide a symbolic start to long-term negotiations or set the stage for real progress, depending on the depth of discussions.
This uncertainty came on the heels of Federal Reserve Chair Jerome Powell’s warning earlier in the week about growing economic risks from the trade impasse. Several Fed policymakers echoed that sentiment on Friday, reinforcing investor concerns over how continued tariff pressures might impact both U.S. inflation and global economic growth.
Highlights:
Trump proposes 80% tariff on Chinese goods.
Weekend talks in Switzerland seen as crucial first step.
Fed officials flag tariffs as increasing economic risk.
Earnings, Trade Progress Elsewhere Offer Some Support
Despite trade headwinds, corporate earnings remained a pillar of resilience. Out of the 450 S&P 500 companies reporting by Friday, 76% beat analyst expectations. However, a growing number have either cut or suspended forward guidance, citing tariff-induced uncertainty.
On Thursday, Wall Street rallied after the U.S. and U.K. signed a limited trade deal, the first since Trump’s 90-day tariff pause. Still, a 10% base tariff on U.K. goods remains. Meanwhile, India reportedly offered to slash tariff gaps with the U.S. in exchange for exclusions from Trump’s duties, reflecting broader international negotiations triggered by the U.S. administration’s protectionist stance.
Highlights:
76% of S&P 500 companies beat earnings estimates.
Many companies withheld guidance due to tariff uncertainty.
U.S.-U.K. deal signed, but 10% tariffs still apply.
India offers tariff cut to avoid U.S. sanctions.
Sector Watch: Energy Gains, Healthcare Drops
Sectorally, energy led gains, up 1.1%, boosted by rising oil prices amid optimism surrounding the trade talks. In contrast, healthcare fell 1.1%, making it the session’s worst performer. Investors appeared to rotate out of defensive sectors in anticipation of potential policy developments.
Meanwhile, Expedia shares plunged 7.3% after the company missed revenue expectations, further weighing on the consumer discretionary segment.
Highlights:
Energy: +1.1%, top gainer.
Healthcare: -1.1%, worst performing sector.
Expedia: -7.3% on revenue miss.
Market Breadth and Volume Statistics
Market breadth was modestly positive on the NYSE, where advancers outnumbered decliners by 1.35-to-1. However, on the Nasdaq, decliners slightly outpaced advancers by a 1.06-to-1 margin. The S&P 500 saw six new 52-week highs and three new lows, while the Nasdaq posted 53 new highs and 97 new lows.
Trading volume totaled 16.03 billion shares, slightly below the 20-day average of 16.47 billion, reflecting tempered activity amid geopolitical and macroeconomic uncertainties.
Highlights:
NYSE: Advancers/Decliners = 1.35-to-1
Nasdaq: Decliners/Advancers = 1.06-to-1
S&P 500: 6 new highs, 3 new lows
Nasdaq: 53 new highs, 97 new lows
Volume: 16.03B vs 20-day avg of 16.47B
