Stocks rose on Friday after a slightly better-than-expected jobs report soothed nerves about how the US economy has been holding up during the early stages of President Donald Trump’s tariff regime. The Dow was up by 570 points, or 1.35%. The broader S&P 500 rose 1.24% and the tech-heavy Nasdaq Composite gained 1.4%. The S&P 500 climbed above 6,000 points, which is a level it had not touched since February. The benchmark index was set to end the week in the green. Stock futures jumped higher Friday morning after data from the Labor Department showed the economy added 139,000 jobs last month, which was a slowdown from the month prior but better than anticipated. Wall Street has been looking for any sign of relief that the economy might be muddling through the uncertainty stoked by Trump’s tariffs. Data from ADP on Wednesday showed an unexpected drop-off in private-sector hiring, though Friday’s Labor Department data helped assuage concerns about the economy. “While job growth decelerated in May, the payroll data came in above expectations and it is extremely encouraging to see a six-figure print during a time of significant uncertainty driven by tariffs and economic fears,” said Glen Smith, CIO at GDS Wealth Management. Yet uncertainty lingers about how Trump’s tariff policy might impact economic growth and business activity in the coming months. It will likely be a few months before the full impact of tariffs on business decisions, hiring and inflation show up in the economic data. “The deleterious impacts of uncertain tariff policies have yet to be fully reflected in the jobs data,” said Steve Wyett, chief investment strategist at BOK Financial. Stocks leading the rebound included Tesla (TSLA), which rose 5% after an enormous drop the day prior. Tesla on Thursday plummeted 14% after President Donald Trump and CEO Elon Musk, who recently stepped aside from his role leading the Department of Government Efficiency, traded barbs on social media. The slide wiped roughly $152 million off of Tesla’s market value, which was the biggest single-day drop in value in the company’s history. Trump on Friday told CNN’s Dana Bash that he’s “not even thinking about Elon” and won’t speak to him “for a while.” “He’s got a problem,” the president said. “The poor guy’s got a problem.” Investors sold government bonds and yields rose as traders dialed back their expectations for rate cuts from the Federal Reserve this year. A resilient labor market gives the Fed more time to hold rates steady. The yield on the 10-year US Treasury rose to 4.47% and the yield on the 30-year US treasury rose to almost 4.94%. “The Fed should be reluctant to cut rates because the full effects of tariffs haven’t impacted inflation numbers yet and the job market isn’t deteriorating enough to force their hand,” said Chris Zaccarelli, chief investment officer at Northlight Asset Management. Trade war uncertainty lingers Investors in recent weeks have increasingly embraced the “TACO” trade, betting that “Trump always chickens out” on his most aggressive tariff threats. Trump and Chinese President Xi Jinping spoke by phone on Thursday. The long-awaited call comes after weeks of simmering tensions between Washington and Beijing. “While there is still uncertainty over tariffs, the stock market is forward looking and has been pricing in an eventual thawing of trade fears,” Smith said. “It’s becoming clear that the rhetoric on tariffs is much tougher than the action.” Trump separately hiked tariffs on steel and aluminum imports to 50% from 25%, which went into effect on Wednesday. Wall Street had largely expected the tariffs, and rallied despite their implementation. “There are no signs of a summer break from tariff drama,” analysts at JPMorgan Chase said in a Tuesday note. US stocks are coming off their best monthly gain since November 2023 as Wall Street has steadily climbed out of the hole caused by Trump’s tariff uncertainty. The S&P 500 is up about 1.75% so far this month. This is a developing story and will be updated.
Dow jumps 550 points as Wall Street tries to cope with trade war, Trump-Musk spat
TruthLens AI Suggested Headline:
"Dow Rises 570 Points Amid Positive Jobs Report and Ongoing Trade War Concerns"
CNN
7.5
TruthLens AI Summary
On Friday, stock markets experienced a significant uptick, with the Dow Jones Industrial Average climbing by 570 points, or 1.35%, following a jobs report that exceeded expectations. The broader S&P 500 index rose by 1.24%, crossing the 6,000-point mark for the first time since February, while the tech-heavy Nasdaq Composite saw a 1.4% increase. This surge in stock prices came after the Labor Department reported the addition of 139,000 jobs in May, a figure that, while slower than the previous month, was nonetheless better than anticipated. Wall Street has been on edge regarding the potential impacts of President Donald Trump’s tariff policies on the economy, and the latest employment data provided a glimmer of hope amid concerns about economic stability. Analysts like Glen Smith from GDS Wealth Management noted the encouraging nature of the job growth, particularly during a period marked by uncertainty related to tariffs and economic fears, although some experts still caution that the full effects of the trade policies have yet to be reflected in the data.
Despite the positive job report, uncertainty about the long-term effects of Trump’s tariffs on economic growth remains. Investors are wary of how these policies will influence business decisions, hiring, and inflation in the months to come. Stocks such as Tesla rebounded significantly, recovering from a sharp decline the previous day, attributed to a public spat between Trump and CEO Elon Musk. The market's response also indicated a shift in expectations regarding Federal Reserve interest rate cuts, as a resilient labor market suggests that the Fed may hold rates steady. Additionally, Trump's recent decision to increase tariffs on steel and aluminum imports has added to the complexity of the trade situation. Analysts believe that while the stock market is currently reacting positively, the underlying trade tensions between the U.S. and China, highlighted by a recent phone call between Trump and Chinese President Xi Jinping, may continue to influence market dynamics moving forward. Overall, despite the recent rally, analysts warn that the threat of ongoing tariff disputes could pose challenges for the economy in the longer term.
TruthLens AI Analysis
The article presents a snapshot of the stock market's reaction to economic data amidst ongoing trade tensions and political drama between President Trump and Elon Musk. The positive job report seemingly alleviated some fears about the economic impact of tariffs, leading to a notable rise in major stock indices. However, concerns about the long-term effects of these policies and the political climate linger.
Market Response to Economic Data
The article highlights a significant surge in stock prices following a jobs report that exceeded expectations. The Dow's 570-point increase and the S&P 500 surpassing 6,000 points indicate a momentary boost in investor confidence. This rise can be interpreted as a temporary relief rally, suggesting that traders are looking for any positive indicators to justify investment decisions amidst uncertainty.
Political Context and Its Effects
The tension between Trump and Musk is also a critical element of the article. The drop in Tesla's stock following their public spat illustrates how intertwined political and corporate dynamics can affect market performance. This interaction raises questions about investor sentiment and how much political commentary can sway stock prices, especially in volatile sectors like technology.
Long-term Economic Concerns
Despite the positive report, analysts emphasize that the long-term effects of tariff policies are yet to be fully realized. The mixed messages from different economic indicators suggest that while there may be short-term gains, the broader economic landscape remains uncertain. The mention of potential negative impacts from tariff policies hints at a cautious outlook for investors.
Impact on Specific Stocks
Tesla's significant bounce-back after a sharp decline indicates that certain stocks are particularly sensitive to news and political statements. This highlights the importance for investors to remain aware of both economic data and the political environment, as they can have immediate and profound impacts on stock performance.
Public Sentiment and Perception
The article aims to create a sense of cautious optimism among readers. By focusing on positive job growth and stock market rebounds, it seeks to reassure the public about the economy's resilience. However, underlying uncertainties are also subtly communicated, encouraging a more nuanced understanding of the current economic climate.
Manipulative Aspects of the Article
The article could be seen as somewhat manipulative, as it emphasizes positive stock market reactions while downplaying the potential negative implications of ongoing trade wars and political disputes. By highlighting the jobs report's success, it may lead readers to overlook the broader economic risks.
In conclusion, the article reflects a complex interplay between economic data, political events, and stock market reactions. While it offers a moment of positive news, the underlying uncertainties warrant a careful approach to interpreting these developments. The reliability of the article hinges on its balanced presentation of both optimistic and cautionary viewpoints, though its focus on immediate gains could be viewed as somewhat selective.