S&P 500 reclaims 2025 gains, but trade strain clouds outlook
📈 Stocks Hold Modest Gains as Investors Digest Tariff Fallout
U.S. stocks searched for direction Wednesday after the S&P 500 erased all its losses for 2025, regaining ground lost in April’s trade-driven slump. At last check:
- S&P 500: +0.2%
- Nasdaq Composite: +0.4%
- Dow Jones Industrial Average: +0.2%
Markets remain in wait-and-see mode as tariff policy debates continue and economic uncertainty looms over corporate earnings.
🔋 AI Surge Gets Boost from Chip Export Shift
The AI trade found fresh fuel:
- Nvidia (NVDA) rose 3% premarket, building on gains from the recent U.S.-China trade truce and a Trump-supported overhaul of chip export curbs
- Foxconn, Nvidia’s server supplier, posted a 91% jump in quarterly profit, citing strong AI demand
- However, Foxconn also cut its full-year outlook due to ongoing tariff risks
The developments bolster belief in the “Magnificent Seven” rally, though the durability of that trade remains a hot topic on Wall Street.
💥 Earnings Underscore Tariff Toll
Even as tech shines, earnings from other sectors reflect mounting pressure:
- American Eagle (AEO) withdrew its guidance Tuesday, citing “macro uncertainty,” sending its shares sharply lower
- Sony (SONY) warned of a $700M hit from U.S. tariffs and slashed its outlook, wiping out projected profit gains
These reports hint at broader earnings erosion tied to protectionist trade policies and shifting global demand.
🧠Conclusion: A Market on a Knife’s Edge
While AI enthusiasm and tech resilience help buoy markets, the undercurrent of tariff tension, weaker earnings, and guidance withdrawals signal rising fragility.
With policy still in flux and global demand uneven, investors may need more than chip rallies to sustain the current bull run.
Tariffs may be paused—but their impact is just beginning to show up in the earnings reports.
