Wall Street Surges as Bank Earnings Impress Amid Trade War Volatility

Wall Street ended the week on a strong note Friday, with major indexes posting sharp gains as big banks kicked off Q1 earnings season and investors digested a rollercoaster week dominated by U.S.-China trade tensions. The Dow jumped 619.05 points (1.56%) to 40,212.71, the S&P 500 climbed 95.31 points (1.81%) to 5,363.36, and the Nasdaq surged 337.15 points (2.06%) to 16,724.46. All three indexes recorded their best weekly percentage gains in over a year.

Investor sentiment was buoyed by Federal Reserve officials, including Boston Fed President Susan Collins, who reaffirmed the central bank’s readiness to ensure market stability. Meanwhile, New York Fed President John Williams dismissed fears of stagflation, noting the U.S. is not entering a high-inflation, low-growth phase.

First-quarter results from JPMorgan Chase, Morgan Stanley, and Wells Fargo exceeded expectations, though analysts flagged potential headwinds from escalating trade disputes. Overall, S&P 500 earnings growth is projected at 8%, down from the initial 12.2% forecast, according to LSEG data.

Despite trade war jitters and Beijing’s retaliation against Trump’s tariff hikes—now reaching an effective rate of 145%—economic data offered mixed signals. The Producer Price Index unexpectedly declined 0.4%, signaling cooling inflation, while consumer sentiment fell and one-year inflation expectations soared to 6.7%, the highest since 1981.

All 11 sectors of the S&P 500 ended in positive territory, led by materials and technology. Market breadth was strong, with advancing issues outpacing decliners by over 2-to-1 on both the NYSE and Nasdaq. Trading volume reached 19.19 billion shares, above the 20-day average. Citi revised its year-end S&P 500 target to 5,800, citing economic slowdown concerns and rising tariffs.