How the stock market brought back all losses after Trump escalated the trade war

It felt much longer, but the US stock market only took a few weeks to bubble until President Donald Trump's “liberation day”. That is then He shocked the Wall Street By announcing Much steeper tariffs As expected at almost all US trading partners.

These tariffs unveiled on April 2 were so serious that they had raised fears A recession in his attempt to redesign the global economy. The S&P 500 within just four days fell by about 12%And the Dow Jones Industrial Average lost almost 4,600 points or about 11%.

Last Friday, however, the S&P 500 gathered 1.5% for a ninth increase in a row And returned to where it was on April 2.

Of course, the index in the heart of many 401 (K) accounts is still more than 7% below its all -time high, which was defined at the beginning of this year. And stocks could easily fall again because the uncertainty about Trump's tariffs remains high, which will ultimately do the economy. But the run for US shares was upwards again and was as wild and unexpected as his fall. Here is a look at what happened:

The break

On April 9, Trump announced a “90-day break” for most tariffs that he announced a week earlier, with the exception of the against China. The S&P 500 rose by 9.5%for one of its best days ever. However, even this good news was a little controversy: Hours before he announced the breakTrump proclaimed the truth that “this is a great time for sale”.

De -escalation

The weeks after the break were a roller coaster ride. Trump spoke about the negotiation of tariffs with the trading partners and also used tariffs to force companies to bring production to the United States in contradiction to each other. The market found relief in what the finance minister describes as a de -escalation between the USA and China. Investors also welcomed Trump's movements to facilitate Customs tariffs on cars as well as smartphones and other electronics.

Bindings and the money

The severity of the fall of the US stock market after the liberation day surprised some market observers. They had assumed that Trump would trace the guidelines that violate Dow Jones's industrial average. After all, this is a president who was repeatedly crowed in his first term of how the Dow was.

But it was afraid in other financial markets that could have forced Trump's hand. Fall prices for the US government bonds Serious worries that the US Finance Ministry lost its status as the safest place in the world to keep money. The value of the United States Dollar also sank In another signal of reducing trust in the United States as a safe port for investors.

Trump himself said that he noticed how Bond investors “became a little Muly” before he held his tariffs.

The economy

Economists and investors had to reconcile contradictory signals about the economy. Consumers' surveys showed a declining trust, especially because of the uncertainty of Trump trade policy. However, what the investors describe as “hard data” as employment figures still showed the economy well. From Friday when the government said Employers added 177,000 jobs In April the hard numbers seemed to have an advantage over the weak feeling.

The Fed

The Federal Reserve lowered three times at the end of 2024, but carried out its own break by keeping the interest stable to evaluate the effects of Trump trade policy. The strong job report seemed to use the Fed release to keep the interest where they are for now -although Trump repeats its call for cuts -but the market is still looking for 3 cuts before the end of the year.

Many profits

At all tumult of the market, US companies continued to deliver profit reports at the beginning of the year that exceeded the expectations of the analysts. Shallen cucuming usually follows in the long term, and that gave the market a remarkable boost.

Three out of four companies in the S&P 500 have defeated the analysts of profits in the past few weeks, including the heavyweights from Markt Microsoft and Meta platforms. According to the fact set, they are on the right track to achieve growth of almost 13% compared to the previous year.

Naturally

Even if companies have delivered thick profits as expected, Many have also warned that they are not sure whether it can take. The CEOs have either reduced or withdraw their financial forecasts for the year because the tariffs of Trump's tariffs will end.

United Airlines even took the unusual step to offer two separate forecasts for the year: one when there is a recession, and if not.

Trump's off-on-on-and-and tariffs had done this for the market at the most volatile time since the beginning of pandemic. The break takes place in the fourth week and the administration still has to announce an agreement with one of the United States trading partners. Based on his youngest comments, Trump is still in tariffs, so that the break could prove exactly that.

“We have already seen how the financial markets will react when the administration progresses with its first tariff plan. So if you accept a different liability in July, when the 90-day break is running, we will see market campaigns similar to the first week of April,” said Chris Zaccarelli, Chief Investment Officer for Northhlight Management.