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

S&P 500 Eyes Fifth Straight Win as U.S.-China Tariff Truce Eases Trade Worries and Inflation Cools

Stock futures pointed higher early Friday as the S&P 500 aimed to extend its rally to a fifth session. The rebound is being fueled by easing trade concerns after the U.S. and China agreed to a temporary 90-day truce on tariffs, providing traders with a relief rally that has lifted major indexes this week.

S&P 500 futures rose 0.2%, while Nasdaq-100 futures added a similar gain. Dow Jones Industrial Average futures climbed 111 points, or 0.3%.

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.

Premarket Movers Reflect Mixed Earnings Sentiment

• Applied Materials (AMAT):  -5% – Posted strong earnings, but forward guidance missed expectations.
• Virgin Galactic (SPCE): -15% – Announced plans to resume commercial spaceflights; Q1 losses narrowed.
• Doximity (DOCS): -20% – Issued a weak sales forecast, signaling slower growth ahead.
• Globant (GLOB): -25% – Cut its 2025 outlook and reported disappointing Q1 results due to soft consumer demand.
• Take-Two Interactive (TTWO): -3% – Mixed results and a delay in the release of Grand Theft Auto VI.

Market Forecast: Cautiously Bullish

With reduced inflation pressure and a temporary easing in trade tensions, the near-term outlook remains cautiously bullish. However, warnings from corporates and disappointing forward guidance from key tech names suggest potential headwinds.

Traders should monitor upcoming economic indicators and options expiration-related volatility closely to assess sustainability of the current rally.

More Information in our Economic Calendar.