American stock markets close higher after a volatile week of Trump’s trade tariffs

U.S. stocks experienced a week of ups and downs due to ongoing trade tensions involving tariffs initiated by the United States. Some relief came as the White House expressed interest in a trade proposal with China, prompting a retaliatory response from China by increasing tariffs from 84% to 125%, following the U.S. move to set tariffs at 145%.

Despite the tumultuous week, major stock indexes ended with gains on Friday, leaving them approximately 5% above the prior week’s closing levels but still lower year-to-date. The Standard and Poor’s 500 rose by 1.8%, the Dow Jones Industrial Average saw a 1.6% climb, and the Nasdaq Composite surged by 2.1%.

Trade tensions escalated when President Donald Trump imposed reciprocal tariffs on various trading partners, leading to consecutive days of market declines. However, when Trump backed down on the higher tariff rates, the market responded positively with significant gains, such as the DJA index’s increase of 2,963 points. Despite this, stocks experienced another drop as the impacts of the tariffs on China reverberated through the market.

Wells Fargo Investment Institute president Darrell Cronk highlighted the ongoing uncertainty surrounding global trade dynamics as a result of the reciprocal tariff policies. Multiple sectors were affected, including a 25% tariff on aluminum, automotive goods, and products from Canada and Mexico outside the U.S.-Mexico-Canada agreement.

Major indexes struggled to return to record highs, with the S&P 500 closing at 5,363.36, the DJIA at 40,212.71, and the Nasdaq Composite at 16,724.46. While each index has experienced a decline from its respective peak, the market remains fluid with fluctuations in response to trade-related developments.

Market sectors responded positively on Friday, with all sectors posting gains. The materials sector led with a 2.99% increase, followed by technology at 2.56%. Notably, Apple’s stock price rose by 4.06%, signaling a rebound after several days of decline. Automotive shares rose as well, with Tesla experiencing a slight dip, while traditional automakers saw mixed performance.

Airline stocks surged, with United Airlines leading the pack with a 4.54% increase. Delta Airlines, American Airlines, and Southwest Airlines also posted gains, reflecting investor optimism in the sector’s recovery. Overall, market sentiment remains cautious as trade uncertainty lingers and tariffs continue to impact various industries.

Consumer sentiment dipped significantly, marking the fourth consecutive month of decline according to a University of Michigan survey. The ongoing economic repercussions of trade policies have contributed to a sense of unease among consumers and investors alike, underscoring the challenges posed by current global trade dynamics.