By Alex Financials

Markets Stabilize as Tariff Shockwaves Recede

The S&P 500 edged up 0.3%, the Dow Jones Industrial Average gained 71 points (0.2%), and the Nasdaq rose 0.3%, marking a rare calm session following the early April crash that erased over $3 trillion in market value.

The initial selloff was triggered by President Trump’s April 2 announcement of sweeping tariffs, including a 34% levy on Chinese imports and 20% on European Union goods, which took effect April 9. Markets have since been rattled by retaliatory measures and supply chain disruptions, but recent signals suggest potential easing.​

Notably, Trump hinted at possible exemptions for auto tariffs affecting Mexico and Canada, providing a glimmer of hope for North American manufacturers.

Banking Sector Leads with Strong Earnings

Financials were among the day’s top performers. Bank of America ($BAC) surged 4% after reporting Q1 earnings per share of $0.90 on $27.37 billion in revenue, exceeding analyst expectations. Citigroup ($C) also rose 2.3%, buoyed by strong quarterly results. ​

These earnings suggest resilience in the banking sector despite macroeconomic headwinds. The 10-year Treasury yield eased to 4.33%, down from last week’s high of 4.48%, indicating a stabilizing bond market.

Tech Stocks Show Mixed Results

In the tech arena, Netflix ($NFLX) climbed over 2% after outlining ambitious plans to double revenue by 2030 and achieve a $1 trillion market capitalization. Conversely, Boeing ($BA) shares fell 3.5% premarket following reports that China ordered its airlines to halt new jet deliveries and cease purchasing U.S. parts, citing high costs due to retaliatory tariffs.

Palantir Technologies ($PLTR) advanced 4.6% after NATO announced it would utilize the company’s AI capabilities, highlighting the growing importance of defense tech.

Investor Sentiment Remains Cautious

Despite today’s gains, investor sentiment is notably cautious. A Bank of America survey revealed that fund managers have rapidly turned pessimistic on U.S. stocks, with the proportion underweight equities rising from 17% in February to 36% in April. Cash holdings have also increased significantly, reflecting concerns over economic growth and trade policies.

However, some analysts see potential for recovery. Fundstrat’s Tom Lee pointed to the Cboe Volatility Index (VIX), which has declined below 31 after spiking above 60, as a historical indicator of market bottoms. He suggests the S&P 500 could climb to 5,500, signaling a possible rebound.

Looking Ahead

As markets digest the impact of tariffs and await further economic data, including the upcoming consumer price index report, investors remain vigilant. While today’s stability offers some reassurance, the path forward will likely depend on policy developments, corporate earnings, and global economic indicators.​