Still, much of Wednesday’s economic data added to worries that Trump’s trade war may drag the US economy into a recession. The president’s on-again-off-again rollout of tariffs has already created deep uncertainty about what’s to come, which could cause damage by itself.
“I’m not taking a credit or discredit for the stock market,” Trump said on Wednesday. “I’m just saying we inherited a mess.”
‘I’m not taking a credit or discredit for the stock market. I’m just saying we inherited a mess.’
Donald Trump
The uncertainty created severe and historic swings in financial markets, from stocks to bonds to the value of the US dollar, that battered investors through April. The S&P 500 at one point dropped nearly 20 per cent below its all-time high set earlier this year, with scary headlines at one point warning of the worst April since the Great Depression.
But the uncertainty has been two-sided, and hopes that Trump may relent on some of his tariffs and reach trade deals with other countries helped the S&P 500 claw back much of its losses.
“This month was like a classic V-shaped roller-coaster,” said Scott Ladner, chief investment officer at Horizon Investments.
After Trump’s “Liberation Day” tariff announcement on April 2, the S&P 500 plunged more 12 per cent in four sessions. On April 9, Trump reversed himself, putting a 90-day pause on some of his most onerous levies, which sparked a 9.5 per cent leap, the biggest one-day rally in 17 years. Since then, the market has drifted higher, with the S&P ending the month down less than 1 per cent.
Still, April was the third straight losing month for the S&P 500. Stocks in the energy industry took some of the hardest hits, dropping over four times more than any of the other 11 sectors that make up the index. Halliburton, an oil services company, lost nearly 22 per cent last month as the price of crude slid on worries that tariffs will weaken the global economy.
However, some stronger-than-expected profit reports from big US companies have helped support the market, and Seagate Technology jumped 11.6 per cent for one of Wednesday’s biggest gains after the maker of data storage joined the parade.
But potentially discouraging trends within the artificial-intelligence industry helped offset such gains for storage makers. AI stocks have been pulling back sharply on worries that their prices shot too high in prior years, when a frenzy around the industry drove them to breathtaking heights.
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Super Micro Computer warned that some customers delayed purchases in the latest quarter, which caused the maker of servers used in AI and other computing to slash its forecast for sales and profit. Its stock tumbled 11.5 per cent for the largest loss in the S&P 500.
Starbucks sank 5.7 per cent after the coffee chain fell short of analysts’ forecasts for revenue and profit in the latest quarter.
There were better corporate news after the close of trading. Microsoft said its cloud computing and artificial intelligence business boosted profits by 18 per cent to $US25.8 billion in the March quarter, beating Wall Street expectations – a dose of relief for investors during a turbulent time for the tech sector and US economy. Its shares jumped 6.2 per cent in after-hours trading.
Instagram and Facebook parent Meta Platforms also posted better-than-expected results after the bell thanks to strong advertising revenue on its social media platforms. The company earned $US16.64 billion in the January to March period, up 35 per cent from the same period a year earlier. Meta’s stock climbed 5.2 per cent in extended trading after the results came out.
In the bond market, Treasury yields held relatively steady. The yield on the 10-year Treasury eased to 4.18 per cent from 4.19 per cent late on Tuesday.
In other international stock markets, indexes finished mixed across Europe and Asia.
AP, Bloomberg
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