4:15pm: Investor optimism grows
Stocks rallied sharply on Friday, wrapping up a strong week as solid economic data and renewed optimism over US-China trade relations boosted investor confidence.
The Dow jumped 564 points, or 1.4%, to end at 41,317, while the S&P 500 rose 1.5% to close at 5,687. The Nasdaq added 267 points, also gaining 1.5%, to finish at 17,978. The Russell 2000, a gauge of small-cap stocks, outpaced the major indexes with a 2.3% advance to 2,021, reflecting a broader risk-on tone.
A stronger-than-expected jobs report helped power the rally, reinforcing views that the labor market remains robust. April’s employment data showed job creation outpacing forecasts, while the unemployment rate held steady—bolstering hopes that the economy can avoid a hard landing.
Investor confidence was further buoyed by signs of progress in trade relations between Washington and Beijing. Chinese officials expressed willingness to reengage in negotiations, contingent on a rollback of certain U.S. tariffs, renewing hopes for easing tensions between the world’s two largest economies.
Technology stocks remained in the driver’s seat, even as Apple warned of a $900 million tariff-related impact this quarter and Amazon struck a cautious tone in its outlook. Energy names, including Exxon Mobil and Chevron, also advanced after delivering strong quarterly earnings.
Friday’s gains extended the winning streaks for both the Dow and the S&P 500, with the latter on pace for its longest run of consecutive weekly gains in two decades. Earlier in the week, sentiment was further underpinned by steady consumer confidence readings and moderating inflation expectations, which helped alleviate recession fears.
3:20pm: Deutsche Bank warns of sharp earnings decline amid tariffs
First quarter earnings have shown strong performance, according to Deutsche Bank, with growth slowing modestly to 10.2% from 13.5% in Q4 2024.
Although Q2 earnings forecasts have been revised down more sharply than usual, the adjustments remain moderate as both companies and analysts await further clarity. The bank believes inventory buffers will help absorb tariff impacts for one or two months.
Looking ahead, Deutsche Bank sees significant downside risk from recently announced tariffs, which it expects will disproportionately hurt US companies. Deutsche Bank forecasts earnings growth to drop from 10 percent in Q1 to 4 percent contraction in Q2, with deeper declines of 10 percent in Q3 and 13 percent in Q4.This contrasts with consensus estimates that still expect positive growth through year-end.
“If sustained, we see the potential impact of the announced tariffs as large and likely to fall disproportionately on US companies,” the analysts wrote.
2:15pm: More Fed previews
Despite political pressure, most economists and market participants do not expect the Fed to act next week. The probability of a rate cut at the May meeting is just 7%, based on pricing in overnight index swaps and Fed futures.
“Neither we nor money markets expect the Fed to cut as early as next week – which may prove a disappointment for the Trump administration,” said economist Kallum Pickering at London broker Peel Hunt, though he noted that the futures market suggests a better-than-even chance of a cut in June.
In fact, following the jobs number, investors pared their bets on Fed rate cuts this year, bonds sold off slightly and equity markets rallied.
Michael Hewson of MCH Market Insights also expects no change on 7 May. While acknowledging the recent contraction in US GDP of 0.3% in the first quarter, Hewson argues this figure was distorted by a front-loading of imports ahead of April’s steep tariffs.
“Given that this import effect is likely to reverse in Q2, it’s highly likely the Federal Reserve will look through this distortion when it meets,” he said.
1:36pm: Fed in no hurry
The April jobs report justifies the Federal Reserve’s cautious approach, according to Bank of America analysts.
"After today, we think the bar is meaningfully higher for a cut in June and perhaps even July," analysts wrote.
"Powell is likely to reiterate that the Fed is in no hurry to cut rates."
12:35pm: Dow eyes ninth straight gain
Wall Street is in rally mode at midday, with all three major indexes cruising higher thanks to upbeat jobs data and a fresh dose of optimism on the US-China trade front.
The Dow is up 1.5%, the S&P 500 is gaining 1.6%, and the Nasdaq is leading the pack with a 1.7% jump as investors embrace a more risk-on tone.
The April jobs report came in stronger than expected, showing 177,000 new jobs added while unemployment held steady at 4.2%—a sign the labor market is holding firm despite broader economic concerns.
On the global front, traders are cheering signals from China that it may return to trade talks if the U.S. rolls back recent tariffs.
Tech stocks are powering the rally, shrugging off Apple’s warning about a $900 million tariff hit this quarter, and even cautious guidance from Amazon hasn’t dampened enthusiasm.
The Dow, meanwhile, is on track for its ninth straight day of gains.
11:25am: Labor market holding up
The US labor market showed reassuring resilience in April, with job growth and wage gains pointing to a steady—if slowing—economy that is giving the Federal Reserve little urgency to act when it meets next week.
Bill Adams, Chief Economist at Comerica Bank noted that job growth was “reassuringly normal,” adding that the Fed is likely to hold rates steady at their May meeting.
The details across industries were mixed, with notable gains in healthcare, transportation, and leisure. “The economy has stable demand for workers in the healthcare sector and financial services,” noted Jeffrey Roach, Chief Economist at LPL Financial. “Despite the ongoing uncertainty with global trade, businesses were still adding to their payrolls in April.”
The April jobs report, while not spectacular, signals a labor market that is holding up—and gives the Fed justification to wait and watch before making any policy changes.
10:35am: Apple downgraded
Apple Inc (NASDAQ:AAPL, ETR:APC) is facing escalating tariff costs and shrinking product margins that could weigh heavily on future profits, prompting analysts at Jefferies to downgrade Apple shares to Underperform.
While Apple’s March-quarter results modestly exceeded Jefferies’ expectations, the firm said the company’s outlook and mounting tariff exposure signal further earnings risk ahead.
“Management guided to a $900 million tariff impact in the June quarter alone,” Jefferies analysts wrote in a note to clients. “We believe tariff impact will expand over time to create more earnings downside.”
Apple posted a 5% year-over-year increase in revenue and net profit for the second quarter of its 2025 fiscal year, with earnings per share rising 8% to $1.65. Growth was primarily driven by strong performance in the US and Asia excluding China, as well as gains in iPad and services revenue.
Still, the company offered only low-single to mid-single-digit revenue growth guidance for the current quarter, raising concern about demand trends and cost headwinds.
9:55am: Markets push higher
Markets opened firmly higher on Friday, extending a recent rally as investors cheered strong economic data and signs of easing trade tensions.
The Dow gained 336 points, or 0.8%, to 41,089. The S&P 500 climbed 51 points, or 0.9%, to 5,655, while the Nasdaq Composite rose 150 points, or 0.9%, to 17,861. The Russell 2000 led gains with a 1.6% jump to 2,007.
A stronger-than-expected US jobs report helped fuel the gains, with job creation outpacing forecasts and the unemployment rate holding steady. The data reinforced confidence in the labor market and broader economy, countering recent concerns about slowing growth.
Adding to the positive tone, China’s Commerce Ministry said it is reviewing US proposals for new trade talks, raising hopes of progress in resolving the tariff dispute that has clouded market sentiment in recent months.
Corporate earnings also played a role, with upbeat results from several tech firms like Reddit and AirBnb supporting broader market strength, even as some giants like Apple and Amazon struck a cautious tone.
“The S&P 500 has now erased all of its losses since Liberation Day,” said Kathleen Brooks at XTB. “If stocks can hold these gains, it would mark the longest uninterrupted winning streak since 2004.”
8:41am: April jobs surpass expectations
The US economy added 177,000 nonfarm payroll jobs in April, surpassing expectations of a 138,000 increase.
The unemployment rate held steady at 4.2%, in line with forecasts. Average hourly earnings rose 3.8% year-over-year, slightly below the expected 3.9%, while month-over-month wage growth came in at 0.2%, also under the 0.3% estimate.
Meanwhile, payroll figures for previous months were revised downward, with March revised to 185,000 from 228,000 and February to 102,000 from 117,000.
7.55am: Wall Street set for positive opening ahead of NFPs
US stocks are expected to open higher, building on Thursday's solid gains after China indicated it was open to tariff talks with the US. Ahead of the opening, April's Non-farm Payrolls (NFPs) report could change things.
Futures markets are calling the Dow Jones 0.41% higher, with S&P futures up 0.36% and those for the Nasdaq up 0.23%.
The Nasdaq led the market yesterday, with the tech-heavy index jumping 1.5%. The S&P 500 rose 0.6% and the Dow added 0.2%. After the closing bell, tech heavyweights Microsoft and Meta posted strong earnings, while Apple and Amazon’s results were more mixed.
Equities have been able to shrug off Apple and Amazon earnings thanks to hopes of trade talks between the US and China, commented IG's Chris Beauchamp.
"Apple and Amazon both failed to follow the lead set by Meta and Microsoft, posting mixed results, dampening some of the resurgent bullish sentiment seen this week," Beauchamp said.
"For Amazon, it was the key cloud revenue miss that hit home, but its warning about weakness in consumer spending also set alarm bells ringing. Apple was better overall, but a warning about tariff costs is another one of those moments where the fears about trade wars begin to materialise."
This morning, all eyes will be on April's NFPs, and investors should watch for signs of fast-forward in firing and a slowdown in hiring, according to SAXO's Neil Wilson.
The consensus estimate is for the addition of 130,000 jobs in the US economy, with estimates ranging from +25k to +195k. March was +228k.
For the impact of the US tariffs, he says you'll probably have to wait for next month.
The NFP report is out at 8:30am EST.