The U.S. stock markets, specifically the S&P 500 index and the Dow Jones Industrial Average, saw a slight increase last Friday, recovering previous losses. This followed a speech by President Trump, which reignited market hope as he mentioned that the tariffs set to begin in early April might not be as severe as the market had anticipated.
Over the past few weeks, the stock market has been influenced by the ever-changing timelines and scales of tariffs, which have made market expectations about corporate profits and Federal Reserve monetary policies more uncertain. However, signs of a rebound were seen last week, with the S&P 500 index rising more than 1% after the Federal Reserve announced its latest policy. The Federal Reserve decided to keep interest rates unchanged and hinted at the possibility of two rate cuts this year, providing support to the market.
Nevertheless, Michael Arone, Chief Investment Strategist for the U.S. SPDR business at State Street Global Advisors, observed that the investors' efforts to boost the stock market rally were unsuccessful, which is concerning. The reason is that the Trump administration's trade policy remains full of uncertainty, the outlook for U.S. economic growth is worrying, and the direction of the Federal Reserve's monetary policy is unclear.
Chicago Federal Reserve Bank President Austan Goolsbee stated that the Federal Reserve needs more time to evaluate the impact of Trump's policies on the economy. New York Federal Reserve Bank President John Williams also indicated that there is currently no need to rush adjustments to the monetary policy.
Last week, the S&P 500 index rose by 0.5%, the Nasdaq by 0.17%, and the Dow Jones by 1.2%, marking the largest weekly gain for the Dow Jones in two months, while the Nasdaq and S&P 500 managed to halt their four-week losing streak.
With the earnings season approaching, some companies have started to lower their profit expectations. FedEx's stock price dropped by 6.45% after the company reduced its annual profit and revenue expectations, mainly due to the weakness and uncertainty in the U.S. industrial economy. Competitor United Parcel Service saw its stock price fall by 1.61%. Due to their broad influence across industries, courier companies are often seen as indicators of the global economy.
The drop in courier stocks dragged down the Dow Jones Transportation Index, which fell by 2.7% at one point but closed with just a 0.2% decline. Additionally, Nike's stock fell by 5.46%, making it the worst-performing company on the Dow Jones Industrial Average, due to expectations of a larger than anticipated decline in fourth-quarter revenue.
In the materials sector, Nucor Corp's stock plummeted by 5.78% as the company forecasted first-quarter profits lower than expected, while Boeing rose by 3.06% after being awarded a contract to build the most advanced fighter jets for the U.S. Air Force, outbidding competitor Lockheed Martin, whose stock fell by 5.79%.
