US stocks end higher even as euphoria over potential tariff relief fades
US stocks opened sharply higher after President Trump softened his stance on his two most market-unfriendly policies after the close on Tuesday: onerous tariffs on China and his desire to sack Fed Chair Jerome Powell.
However, major indexes finished well off their highs of the day after Treasury Secretary Scott Bessent said that any relief on China would not be unilateral. The S&P 500 ended 1.7% higher, the Nasdaq 100 advanced 2.3%, and the Russell 2000 went up 1.5%.
Consumer discretionary and tech were the top-performing S&P 500 sector ETFs, while energy and consumer staples finished lower. Oil stocks in particular were bedeviled by reports that OPEC+ is poised to boost production even more next month, while the softness in consumer staples was a story of traders ditching the safer stocks that have held up well during the market tumult in favor of riskier stocks.
Tesla was among the major drivers of gains in the S&P 500 today despite reporting underwhelming earnings on Tuesday after the close, thanks to CEO Elon Musk’s pledge to spend less time with DOGE and more with the company. Other so-called Trump trades like Palantir, Trump Media & Technology Group, and Axon also outperformed.
Potential relief on tariffs with China was positive for semi companies, with Intel one of the standouts in the industry amid reports that management is poised to cut 20% of its workforce.
Retailers were also massive beneficiaries of the less combative tone on cross-border commerce, with the likes of Victoria’s Secret and Five Below, which source products from Asia, outperforming the market.
Boeing’s turnaround plan continues to bear fruit, with the company’s first quarter of revenue growth since 2023 and a much smaller-than-expected loss per share driving upside for the stock.
Philip Morris gained after reporting better-than-expected earnings, buoyed by sales of enough Zyn cans to span Route 66.
Analysts at Bernstein have taken a shining to Mediterranean chain Cava, upgrading the stock and boosting their price target, contributing to a solid advance for the shares.
AT&T pared its big premarket gains on the heels of a ho-hum quarterly report in which earnings per share were in line with estimates.
CoreWeave put in another huge advance after Mike Novogratz’s Galaxy Digital deepened its partnership with the cloud-computing company at its data center campus.
