It seemed much longer, but the US stock market only needed a few weeks to roar until it was on President Donald Trump's “Liberation Day”. This is whereHe shocked Wall StreetannouncingMuch steep ratesthat planned on almost all American trade partners.
These prices unveiled on April 2 were so serious that they raised fears that Trump was not worried about causinga recessionin his attempt to reshape the world economy. In just four days, the S&P 500fell by around 12%And the industrial average of Dow Jones lost almost 4,600 points, or about 11%.
Last Friday, however, the S&P 500rallied 1.5% for a ninth consecutive gainAnd fell back to the place where he was on April 2.
Of course, the index in the heart of many 401 accounts (K) is still more than 7% below its high set of all time earlier this year. And stocks could easily drop because uncertainty remains high on what Trump prices will ultimately save. But the race for American actions upwards was as wild and unexpected as its fall. Here is an overview of what happened:
The break
On April 9, Trump announced on social networks a “90 -day break” for most of the prices he had announced a week earlier, except those against China. The S&P 500 has climbed 9.5% for one of its best days of all time. Even this good news came with a little controversy, however:A few hours before announcing the breakTrump proclaimed on Truth Social that “it's the ideal time to buy”.
De -escalation
The weeks after the break were roller coaster. Trump has talked about the negotiations of prices with business partners while using prices to force companies to move manufacturing in the United States, two goals apparently in contradiction. The market has found a relief in what the Treasury Secretary has qualified de-escalation between the United States and China. Investors have also welcomed Trump movements to facilitateCars pricesas well as smartphones and other electronic devices.
Links and male
The severity of the US stock market after the release day surprised certain market observers. They assumed that Trump would return to policies that harm the industrial average of Dow Jones. He is a president, after all, who sang several times during his first mandate on the way Dow was going.
But it was fear in other financial markets that may have forced Trump's hand. Outflow price for American government obligationsconcerns raisedThat the US Treasury Market lost its surest location in the world to keep money. The value of the United StatesDollar also sankIn another signal for decreasing faith in the United States as a refuge for investors.
Trump himself said he noticed how bond investors “became a little zero” before he expected his prices.
The economy
Economists and investors had to reconcile the contradictory signals of the economy. Consumer surveys have shown a drop in confidence, largely due to the uncertainty created by Trump's trade policy. But what investors call “hard data”, such as employment numbers, said the economy was still going well. Friday, when the government saidEmployers had added 177,000 jobsIn April, hard numbers seemed to have an advantage over the weak feeling.
The Fed
The federal reserve reduced the rates three times at the end of 2024, but then implemented a break from itself by keeping the stable rates, in part to assess the impact of Trump's trade policy. The strong job report seemed to give the Fed authorization to maintain the rates where they are so far – despite Trump repeating his call for cuts – but the market is still looking for 3 cuts before the end of the year.
A lot of benefits
Thanks to all the tumult of the market, American companies have continued to provide profit reports for the beginning of the year that exceeded the expectations of analysts. The equity prices tend to follow the long -term profits, which gives the market a notable boost.
Three out of four companies in the S&P 500 have been beating analysts' expectations for profits in recent weeks, including market heavy goods vehicles such asMicrosoft and Meta Platforms. They are on the right track to provide growth of almost 13% compared to the previous year, according to FactSet.
To be sure
Even if companies have made more than expected profits,Many have also warned that they are not sureIf it can last. CEOs have lowered or withdraw their financial forecasts for the year given all the uncertainty about how Trump's prices will end.
United AirlinesEven made the unusual movement of the offer of two distinct forecasts for the year: one if there is a recession, and one otherwise.
Trump’s approach to Trump due to prices has made it the most volatile period for the market since the start of the pandemic. The break is in its fourth week and the administration has not yet announced an agreement with any of the American exchanges. Based on his recent comments, Trump is still all all about prices, so the break could be just that.
“We have already seen how the financial markets will react if the administration is progressing with its initial pricing plan, so unless they take a different approach in July when the 90 -day break out, we will see market measures similar to the first week of April,” said Chris Zaccarelli, director of investments for Northlight Asset Management.
This story was initially presented on Fortune.com
