Stocks Whipsaw as Trade Tensions Stir; Earnings Optimism Revives Rally – US Market Wrap
Wall Street was gripped by sharp swings as traders grappled with conflicting signals over the trajectory of US–China trade tensions. Stocks surged, sank, and then rebounded as optimism over corporate earnings helped restore some confidence.
After one of the strongest six-month stretches for equities since the 1950s, markets have entered what analysts are calling a “healthy reset” — brief waves of profit-taking that have yet to derail the broader rally. The S&P 500 climbed as much as 1.2% before turning negative around midday in New York, only to recover within the hour as dip buyers resurfaced.
Investors toggled between trade headlines and the earnings outlook, which has underpinned a $15 trillion rebound in US stocks since April’s meltdown. Financial heavyweights including Morgan Stanley and Bank of America advanced after reporting robust trading revenues, joining the other Wall Street giants that have benefited from a boom in market activity. Meanwhile, ASML Holding NV lifted the semiconductor sector after delivering upbeat comments on artificial intelligence demand.
In fixed income, Treasuries paused following a rally that pushed two-year yields to their lowest since 2022, while gold hovered near a record $4,200 an ounce as investors sought safety amid policy uncertainty.
Treasury Secretary Scott Bessent said the administration may extend the pause on elevated US tariffs on Chinese goods if Beijing delays its new export restrictions on rare earth materials. Speaking at a CNBC event, Bessent added that President Donald Trump is “a go” for a planned meeting with Chinese President Xi Jinping later this month.
Separately, Federal Reserve Governor Stephen Miran warned that ongoing trade frictions have heightened risks to growth, underscoring the need for the Fed to cut rates swiftly to cushion the economy.
