• U.S. stocks surged, with the S&P 500 achieving its longest winning streak in 20 years, fueled by a strong jobs report and trade optimism.
• Trump softened his stance on the trade war, and China showed interest in trade talks, boosting investor confidence.
• Strong earnings from major tech companies like Meta and Microsoft helped drive the market rally, despite mixed results from Apple and Amazon.

The S&P 500 reached its longest winning streak in two decades on Friday. The rally followed China’s shift toward openness in trade talks and a stronger-than-expected jobs report. The Dow Jones surged 564 points, or 1.39%, while the S&P 500 climbed 1.47%. The Nasdaq Composite saw an increase of 1.51%. This marked the ninth consecutive gain for both the Dow and the S&P 500. It was the S&P’s first nine-day streak since November 2004.

A Strong Jobs Report Fuels Investor Optimism

The Labor Department’s report showed the U.S. economy added 177,000 jobs in April, surpassing expectations. Analysts had anticipated only 135,000 jobs. Chris Zaccarelli, CIO of Northlight Asset Management, said the data offered relief to investors. The positive job numbers suggest that recession fears might be overblown for now. Zaccarelli added that the “buy-the-dip” strategy could continue if the pause on tariffs holds. Strong employment numbers helped boost market confidence.

Trump Softens Stance on Trade War

Stocks have been climbing recently as President Trump softened his tone on the trade war with China. White House officials hinted at potential trade deals with countries like India. Investors seemed encouraged by this shift in policy. Trump’s temporary suspension of tariffs, excluding those on China, has sparked investor optimism. Moreover, China expressed its willingness to address U.S. concerns. A statement from China’s Commerce Ministry said the country is evaluating U.S. proposals for trade talks. This subtle shift in China’s stance raised hopes for progress in negotiations.

The U.S. Labor Market Shows Strength

Despite concerns about trade policy, U.S. employment remains strong. David Russell, Global Head of Market Strategy at TradeStation, pointed out that the solid job numbers provide policymakers with breathing room. He emphasized that the economy is resilient enough to avoid a recession if trade issues are resolved quickly. However, uncertainties about the future of trade policy could still affect economic stability. David Doyle from Macquarie warned that the labor market’s strength could be tested by trade policy changes in the coming months.

Economic Uncertainty Remains a Concern

While the April jobs report was a bright spot, other economic data raised concerns. The Commerce Department revealed that the U.S. economy contracted in the first quarter, marking the first decline in years. This data added to Wall Street’s anxieties. CNN’s Fear and Greed Index returned to “fear” after briefly moving into “neutral.” This shift reflects the ongoing uncertainty in the market. Experts like Matt Stucky from Northwestern Mutual emphasized that investors remain wary of the policy unpredictability. Stucky said the market could swing between pessimism and optimism in the coming weeks.

Trump Calls for Federal Reserve Rate Cuts

On Friday, President Trump posted a message urging the Federal Reserve to cut interest rates. He argued that there is no inflation and that the Fed should lower rates. Despite this, traders reduced their expectations of a rate cut in June. According to the CME FedWatch tool, the likelihood of a June rate cut fell to 36.6% from 55%. The strong jobs report gives the Fed more time to focus on controlling inflation, which remains above the target of 2%. However, Gina Bolvin from Bolvin Wealth Management believes the report buys the Fed time to address inflation.

Big Tech Continues to Shine

The stock market rally also benefitted from strong earnings reports from major tech companies. Meta and Microsoft posted impressive results. Meta’s shares increased by 4.2% on Thursday and 4.3% on Friday. Microsoft saw a 7.6% increase on Thursday, followed by another 2.3% rise on Friday. These results reassured investors about Big Tech’s resilience. Analysts from Barclays noted Meta’s ability to perform well despite market challenges. Microsoft’s earnings highlighted the ongoing demand for AI data centers, further boosting investor confidence.

Mixed Earnings Reports from Apple and Amazon

Apple’s earnings report was less favorable. The company warned it might face a $900 million loss in the second quarter due to tariffs. This led to a 3.74% drop in Apple’s stock price on Friday. On the other hand, Amazon reported solid first-quarter results. However, the company’s guidance for the rest of the year was mixed. This caused Amazon’s stock to edge lower on Friday. While both companies showed resilience, their mixed results illustrated the ongoing uncertainty in global trade.

The S&P 500 Could Extend Its Streak

If the S&P 500 closes higher again on Monday, it will mark the first 10-day winning streak since the 1990s. According to Howard Silverblatt, a senior index analyst at S&P Dow Jones Indices, this would be a significant milestone. The stock market rally continues to be driven by strong earnings and investor optimism about trade talks. However, many investors remain cautious due to ongoing policy uncertainty. The future of the stock market will depend on how trade negotiations progress and whether the global economy can maintain its momentum.