Traders are experiencing a positive atmosphere on Wall Street, with stocks experiencing consistent gains throughout the week. The S&P 500 has concluded its fourth consecutive session in positive territory, showing a 4.54% increase over the past four days.
Negotiations on tariffs appear to be easing, as the U.S. engages in discussions with other nations. However, the path forward may still have obstacles.
For instance, although an agreement has been reached with the U.S., China continues to restrict the export of rare earth metals essential for critical sectors like defense and energy.
Additionally, while India is working on a trade deal with the U.S., President Trump seems to demand more than just a reduction in tariffs. Trump told Apple CEO Tim Cook that he does not want the company “building in India,” which raises questions about India’s willingness to limit Apple’s manufacturing activities.
Jerome Powell, Chair of the U.S. Federal Reserve, acknowledged these challenges, cautioning on Thursday that “supply shocks” might occur more frequently and could be more persistent in the future.
This uplift in market sentiment, possibly influenced by the recent U.S.-China trade agreement, may be short-lived as underlying economic challenges could come into play.
What’s important to know today
Powell warns of potential supply shocks: During a Fed conference on Thursday, Powell indicated that long-term interest rates may rise, as inflation could become more unpredictable due to the possibility of frequent supply shocks. He did not name specific tariffs but indicated risks associated with them.
S&P achieves fourth day of gains: On Thursday, the S&P 500 rose by 0.41%, marking its fourth positive session. The Dow Jones Industrial Average increased by 0.65%, while the Nasdaq Composite saw a slight drop of 0.18%. Asia-Pacific markets showed mixed results on Friday.
Trump discusses trade relations: During discussions regarding trade with India, Trump expressed his discontent with Tim Cook of Apple about the company’s plans to manufacture in India. Trump stated, “I had a little problem with Tim Cook yesterday,” making it clear he prefers Apple to focus on U.S. production.
China’s rare earth exports remain restricted: Following the trade agreement between the U.S. and China, China has temporarily lifted some export restrictions impacting 28 American firms. However, it continues to block the export of seven rare earth metals, essential for the nation’s defense, energy, and automotive sectors.
