Stock markets in the U.S. saw a positive turn as the Nasdaq index climbed, driven by a rebound in technology stocks and a weakening dollar amidst escalating trade tensions between the U.S. and China. The Nasdaq surged by 1.43%, with the S&P 500 and Dow also experiencing gains. This shift followed days of selling triggered by tariff increases from both countries, sparking concerns about the stability of the Treasury market.

The surge in tech stocks, particularly notable with Apple and Tesla seeing significant gains, played a key role in driving the market rebound. Apple’s 5% jump and Tesla’s over 5% increase contributed to the overall positive sentiment in the technology sector. Other sectors like communication services, consumer discretionary, and industrials also showed positive movements, while real estate and utilities faced declines as investors shifted focus towards growth opportunities.
Amidst the market rebound, retailer Walmart saw a 5% rise, with the company expecting to gain market share despite withdrawing its Q1 operating outlook. Delta Air Lines and Capri also experienced notable increases, reflecting a mix of positive and cautious sentiment in the market.

Financials witnessed strong buying activity, with major players like Citigroup, Wells Fargo, and JPMorgan Chase seeing significant gains. This surge in financial stocks was attributed to traders positioning themselves ahead of major bank earnings announcements, anticipating a correction following recent recession concerns.
Despite recession fears, Treasury yields experienced a spike, briefly surpassing 4.51% before settling around 4.40%. The market speculated that China’s potential sell-off of U.S. government debt in response to tariff escalations could be driving this shift, reminiscent of liquidity concerns observed in March 2020.

The weakening dollar trend continued, with investors turning to assets like gold and the Swiss franc. The dollar index dropped, while gold prices surged significantly. This broad retreat from U.S. assets was viewed as a response to growing recession fears and uncertainties surrounding trade policies.
Looking ahead, market focus is set on key events like the 30-year bond auction and major bank earnings reports, which could influence market sentiment. The Federal Reserve’s flexibility may be constrained by rising long-term yields and inflation risks, prompting traders to closely monitor market stability indicators and corporate guidance for future trends.
Overall, the market landscape remains dynamic, with various factors influencing investor sentiment and trading patterns. The evolving trade tensions between the U.S. and China, coupled with broader economic indicators, continue to shape market movements and investment strategies.
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