Markets Rebound on Trade Hopes

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💰Markets Rebound on Trade Hopes

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Stocks bounced back this week as renewed optimism around a potential easing of U.S.-China trade tensions helped lift investor sentiment. Treasury Secretary Scott Bessent’s comments pointing to near-term tariff relief sparked a broad-based rally across equities. While earnings and economic signals remain mixed, markets found fresh momentum amid hopes of smoother global trade ahead.

Let’s go.

BIG IDEA 1💡
Trade Hopes Fuel Market Rebound

Relief Rally on Wall Street

• Dow Jumps 1,016 Points: Markets surged after Treasury Secretary Scott Bessent suggested that the current tariff standoff with China may ease in the near future.

• S&P 500 Climbs 2.5%: The index rebounded decisively from Monday’s drop, with buying activity broadening across sectors.

• NASDAQ Gains 2.7%: Technology stocks led the charge, recovering recent losses as investor sentiment improved.

Fed Messaging Adds Confusion

• Kashkari Flags Tariff Risks: The Minneapolis Fed President expressed concern about weakening economic confidence due to prolonged trade pressures.

• Barkin Points to Labor: Richmond’s Fed chief downplayed inflation worries, implying support for rate cuts if job growth softens.

• Powell Remains in Spotlight: Political noise surrounding the Fed Chair’s role continues to create uncertainty around the central bank’s path forward.

Tesla’s Rocky Quarter with a Silver Lining

• Earnings Miss and Sales Slide: Q1 results fell short, with automotive sales down 20% and margins dropping to 12.5%.

• Musk Refocuses on Tesla: Pledges to wind down his government role by May and dedicate more time to EV innovation and robotaxis.

• Stock Climbs 4% After Hours: Musk’s commitment and long-term vision helped calm investor nerves.

BIG IDEA 2💡
Crypto Surges and Market Reacts

Crypto Momentum Returns with Institutional Support

• Bitcoin Tops $91K: The rally was fueled by a $555M purchase from MicroStrategy, bringing its total holdings to over 538K BTC.

• ETF Inflows Hit 3-Month High: Spot Bitcoin ETFs saw $381M in net inflows, led by ARK and Fidelity funds.

• Altcoins Join the Party: Ethereum rose 8%, while Solana, Polygon, and Dogecoin posted strong gains amid increased risk appetite.

Some investors are looking beyond Bitcoin and exploring alternative digital assets.

Key Sectors React to Macro Headlines

• Verizon Up 0.6%: Scaled back customer promotions to maintain margin discipline despite subscriber losses.

• Kimberly-Clark Cuts Outlook: Rising supply-chain costs due to tariffs forced the consumer goods company to revise its profit forecast.

• Halliburton Slips 5.6%: Slower drilling activity in North America dragged down demand for services and equipment.

AI Pressure and Investor Sentiment

• AI Export Risks Rattle Tech: U.S. chip restrictions hit Nvidia hard, with shares down 14% since mid-April, though analysts believe much of the downside is already priced in.

• Valuation Creates Opportunity: Bank of America sees Nvidia trading at just 19x 2026 earnings, well below historical averages, with margin recovery expected as Blackwell chips scale.

• Investor Sentiment Still Fragile: Yield curve movement and political tensions around the Fed have kept markets cautious, even as equity indexes rebound on short-term trade optimism.

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