S&P500: Bulls Rally on Trade Truce While AMAT Drags on Tech Stocks

Investor sentiment has notably improved on signs that global trade tensions may be stabilizing, at least in the short term. The S&P 500 is up 4.5% for the week, with the Nasdaq Composite surging more than 6%. The Dow has also gained 2.6%. Thursday’s gains came despite mixed earnings reports and ongoing concerns around tariff-driven cost pressures.

Cooling Inflation Offers Additional Support

Markets also reacted positively to inflation data that showed continued softening in price pressures. Wholesale prices declined 0.5% in April, following a consumer price index reading earlier in the week that showed a 2.3% annual increase—its lowest rate since February 2021.

These figures have bolstered hopes that inflation may be easing without further monetary tightening, a key consideration for equity bulls positioning ahead of next month’s Fed meeting.

Corporate Warnings Highlight Tariff Risks

Despite the short-term optimism, not all market signals are reassuring. Walmart warned it could raise prices later this month due to tariff-related costs, suggesting that underlying pressures from the U.S.-China standoff remain.

According to Ritholtz Wealth Management’s Callie Cox, “There is an undercurrent of anxiety,” even if markets are temporarily overlooking such risks in favor of a tech-led rally. These lingering concerns could weigh on sentiment if further corporate warnings emerge.