S&P 500 Wavers Near Record After Trade-Fueled Rout: Markets Wrap

Stocks fluctuated near all-time highs as investors parsed President Donald Trump’s decision to delay the start of increased duties on several trading partners amid signs he’s open to talks. Treasuries joined a global slide of longer-dated bonds. The dollar rose.

Following a selloff that drove the S&P 500 slightly below overbought levels, the gauge fluctuated around 6,200. Most megacaps remained under pressure despite a rebound in Tesla Inc. Strategists at both Goldman Sachs Group Inc. and Bank of America Corp. raised their year-end targets for the US equity benchmark, highlighting corporate resilience.

As Treasuries slipped, 30 year-yields approached 5%, following a rout in longer-dated Japanese bonds and German bunds. Traders also geared up for a $58 billion sale of three-year notes - the first in a trio of US government auctions this week.

Wall Street is digesting the latest tariff developments after Trump signed an executive order that delayed “reciprocal” tariffs, effectively buying each affected nation an extra three weeks to cut a deal. He said that “for the most part” he was content to simply impose the duties, even as he indicated he was continuing negotiations.

“Trade-war headlines are regaining momentum, but that doesn’t mean we’re in for a repeat of late March and early April,” said Bret Kenwell at eToro. “If there is confidence that negotiations will continue or deadlines will be extended, markets may continue to shake off the headlines.” 

However, Kenwell noted, if investors feel that the trade situation could become “more bite than bark,” we could very well see another pullback in stocks. 

“Unless the situation really unravels, a 5% to 10% pullback will likely be viewed as a buying opportunity by retail investors,” he noted.

“President Trump’s latest round of tariffs were viewed as not-as-bad-as-feared with deadlines being pushed back and multiple mentions of potential exemptions mentioned in discussions with the EU and Asian trading partners,” said Tom Essaye at The Sevens Report.

Meantime, Goldman Sachs strategists led by David Kostin raised their outlook for US stocks, saying they expect the Federal Reserve to act sooner to cut interest rates.

The team lifted their 12-month forecast for the S&P 500 to 6,900 from 6,500, and increased the year-end target to 6,600 from 6,100. They also cited lower Treasury yields and the continued strength in the largest US companies as reasons why stocks are likely to keep heading higher.

Bank of America also boosted its outlook for US equities, with strategists led by Savita Subramanian raising their S&P 500 year-end forecast to 6,300 from 5,600, and establishing a 12-month target of 6,600.

“We believe the setup for equity markets looks bullish, even in light of renewed trade-war jitters,” said Craig Johnson at Piper Sandler. “While equities may come under some near-term pressure, investors are increasingly becoming numb to the tariff headlines and instead focusing on the trendlines.”

Johnson says technically, measures of market breadth and trends remain constructive, and the weight of the technical evidence supports his bullish outlook as earnings season approaches.

• HSBC is turning cautious on three of the biggest US bank stocks following a record rally that’s brought the group within shouting distance of an all-time high.

• The firm downgraded JPMorgan Chase & Co., Goldman Sachs Group Inc. and Bank of America Corp.

• President Donald Trump called for new rules that would restrict access to tax incentives for solar and wind projects that already had been pared back by his $3.4 trillion budget bill designed to end green energy incentives.

• Ciena Corp. was cut to underweight from equal-weight citing at Morgan Stanley, which cited a lack of margin upside in the near term.

• Apple Inc.’s top executive in charge of artificial intelligence models is leaving for Meta Platforms Inc., another setback in the iPhone maker’s struggling AI efforts.

• Hershey Co. appointed Kirk Tanner to be the chocolate maker’s next president and chief executive officer.

• Robinhood Markets Inc. Chief Executive Officer Vlad Tenev said the firm is in talks with regulators over its offering of tokenized equities in Europe, after the launch drew rebuke from companies including OpenAI.

• Circle Internet Group Inc. was initiated with a sell-equivalent rating at Mizuho, with the firm seeing a 25% to 30% potential downside to consensus revenue for 2027.

• Novartis AG won regulatory approval for the first medicine designed for babies with malaria, the latest development in the global fight against the mosquito-borne disease.

• Samsung Electronics Co.’s profit fell for the first time since 2023, reflecting the deepening market share losses clouding the memory chipmaker’s prospects in the AI era.

Some of the main moves in markets:

Stocks

• The S&P 500 was little changed as of 10:50 a.m. New York time.

• The Nasdaq 100 was little changed.

• The Dow Jones Industrial Average fell 0.3%.

• The Stoxx Europe 600 rose 0.4%.

• The MSCI World Index fell 0.1%.

• Bloomberg Magnificent 7 Total Return Index was little changed.

• The Russell 2000 Index rose 0.7%.

Currencies

• The Bloomberg Dollar Spot Index rose 0.2%.

• The euro fell 0.1% to $1.1693.

• The British pound fell 0.4% to $1.3552.

• The Japanese yen fell 0.6% to 146.94 per dollar.

Cryptocurrencies

• Bitcoin rose 0.7% to $108,603.75.

• Ether rose 1.5% to $2,573.35.

Bonds

• The yield on 10-year Treasuries advanced four basis points to 4.42%.

• Germany’s 10-year yield advanced four basis points to 2.68%.

• Britain’s 10-year yield advanced six basis points to 4.64%.

• The yield on 2-year Treasuries advanced two basis points to 3.91%.

• The yield on 30-year Treasuries advanced four basis points to 4.96%.

Commodities

• West Texas Intermediate crude rose 0.3% to $68.15 a barrel.

• Spot gold fell 1.2% to $3,294.83 an ounce.