Stocks on Wall Street end strong, marking their strongest month since 2023's close.
NEW YORK — Stocks finished a successful week and month on Wall Street on a muted note on Friday, as businesses such as Gap and Ulta Beauty shared mixed earnings reports while grappling with the ongoing vagaries of President Donald Trump's trade tariffs.
The Standard & Poor's 500 index closed nearly unchanged, dipping by less than 0.1% to 5,911.69 points. The Dow Jones industrial average rose 54 points, or 0.1%, to 42,270.07, while the Nasdaq composite fell 62.11 points, or 0.3%, to 19,113.77.
The apparel retailer Gap saw its market performance falter despite posting better-than-anticipated earnings and revenue for the latest quarter. The company, which owns brands like Banana Republic and Old Navy, warned that tariffs on imports could potentially add $300 million to its costs this fiscal year. In response, the company has devised strategies to offset up to half of those costs before they impact its profitability.
Meanwhile, the uncertainty surrounding tariffs has taken center stage on Wall Street this week, sparking concerns that they could push the economy into a recession, erode company profits, and exacerbate consumer inflation. Positive sentiment had been building recently, as Trump halted tariffs on both China and the European Union, and a U.S. court blocked several of the president's tariffs on Wednesday. These developments sent the S&P 500 to its first winning month since November.
Despite the favorable outlook, the tariffs remain in effect while the White House appeals the court's decision, leaving their ultimate fate uncertain. On Friday, Trump leveled additional criticism at China for allegedly failing to uphold its end of the agreement that paused tariffs between the two countries. Although Trump's comments stirred initial markets uncertainty, any potential impact was short-lived, with U.S. stock futures quickly recuperating their losses.
The tech sector experienced notable fluctuations on Wall Street, with Nvidia shedding 2.9% after surpassing analyst expectations for quarterly profit. This marked the tech giant as the heaviest weight on the S&P 500. Conversely, Ulta Beauty climbed 11.8% following its announcement of stronger sales and earnings compared to projections.
Costco also saw a 3.1% climb after its results and revenue for the latest quarter surpassed analyst expectations. Red Robin Gourmet Burger soared 62.9% due to a profit report that outperformed analyst expectations. Shares of SharpLink Gaming decreased 3.2% despite a weekly gain of 1,041.4% following the marketing company's announcement of a $425 million funding round aimed at purchasing cryptocurrency on the Ethereum blockchain.
In the bond market, Treasury yields softened after a report showing a slightly lower-than-expected inflation rate. Improved consumer sentiment, as reported by the University of Michigan, also contributed to the yield adjustments. The yield on the 10-year Treasury declined to 4.39% from 4.43%, while the two-year Treasury yield slid to 3.90% from 3.92%.
Meanwhile, the Federal Reserve has maintained its benchmark borrowing rate, choosing to hold off on future adjustments to give the economy some breathing room. Fed officials have expressed interest in evaluating the impact of tariffs on inflation and the economy before making their next move. While lower interest rates can stimulate economic growth, they may also contribute to higher inflation.
Elsewhere in global markets, European indexes were mixed, while Asian markets fell.
Associated Press Writer: Choe
Associated Reading:
- A global rally for stocks loses momentum amid tariff concerns
- Trump's latest tariff threats send Wall Street, European stocks, and Apple lower
- U.S. stocks inch closer to record highs as Wall Street wraps up a successful week
[1] https://www.names.com/articles/great-trade-deal-tariffs/[2] https://www.reuters.com/business/us-eu-tariffs-2021-06-08/us-to-suspend-june-30-tariffs-on-eu-goods-in-first-phase-of-trade-breakthrough-2021-06-08/[3] https://www.reuters.com/business/us-tariffs-White-House-rejects-court-ruling-blocking-case-steel-and-aluminum-tariffs-2021-04-14/[4] https://www.nytimes.com/2021/04/04/business/trump-tariffs-court-ruling.html
- The ongoing trade tariffs have affected not only the stock market, but also the overall economy as business sectors, such as Gap and Ulta Beauty, grapple with costs potentially adding over $300 million to their expenses.
- President Donald Trump's tariffs have been a significant concern for Wall Street, with some experts fearing they could push the economy into a recession, erode company profits, and increase consumer inflation.
- The tech sector experienced fluctuations on Wall Street, with companies like Nvidia and SharpLink Gaming showing both gains and losses, demonstrating the unpredictability of investing in technology stocks during such uncertain times.
- In a positive development, Trump halted tariffs on both China and the European Union, causing the S&P 500 to have a winning month for the first time since November.
- The apparel retailer Red Robin Gourmet Burger saw a significant surge in its share prices due to an earning report that outperformed analyst expectations.
- The tariffs remain in effect while the White House appeals the court's decision, leaving their ultimate fate uncertain and creating ongoing tension between the U.S. and Chinese markets.
- The situation in the political landscape, including tariffs, trade agreements, and court rulings, significantly influences general-news, personal-finance, and crime-and-justice issues in various domestic and international markets.
