By Alexander Osipovich and Angus Berwick
The Dow Jones Industrial Average overcame a midday swoon to close higher for a fifth straight session on Monday, extending a relief rally underpinned by optimism that trade deals are in the offing.
The blue-chip index ended the day with a gain of 0.3%, or about 114 points. The S&P 500 rose less than 0.1% after wavering between gains and losses throughout the day. Both benchmarks finished with their first five-day winning streak since late 2024. The Nasdaq Composite slipped 0.1%.
Stocks rebounded last week as the Trump administration softened its stance on tariffs and signaled a readiness to negotiate trade deals. On Monday, Treasury Secretary Scott Bessent gave mixed signals on trade, just as investors prepared for a big week of corporate earnings that could shed light on how the trade war is affecting the U.S. economy.
In the coming days, a large chunk of S&P 500 companies is set to report results from the first three months of 2025. While the quarter ended just before President Trump's "Liberation Day" tariff announcement on April 2, investors will pay close attention to whatever corporate executives say about both present conditions for their businesses and the road ahead.
"The most important questions on earnings calls are going to be the trends throughout the end of the quarter, compared with the quarter as a whole, as well as looking for any guidance changes," said Brian Burrell, portfolio manager for Thornburg Investment Management.
Bessent said during an television interview on CNBC that China should be responsible for reducing trade tensions, given that "they sell five times more to us than we sell to them." But he also said many countries had put forward trade proposals, and that negotiations with Asian trading partners, particularly India, were going well.
Four of the Magnificent Seven large-cap tech companies plan to report results this week: Amazon, Apple, Meta Platforms and Microsoft. Apple's reliance on its Chinese supply chain will be particularly scrutinized.
Google parent Alphabet posted strong quarterly earnings last week but warned of coming headwinds from the end of the "de minimis" trade loophole. The exemption for shipping lower-value goods is due to end Friday, which could dent Alphabet's digital-ad revenue, primarily from Asia-Pacific retailers.
Shares of chip maker Nvidia, another Magnificent Seven stock, fell 2.1% on Monday after a report in The Wall Street Journal that China's Huawei is developing a new artificial-intelligence chip that it hopes could replace some higher-end Nvidia products.
Other companies reporting earnings this week include big consumer-facing brands such as Coca-Cola, McDonald's and Starbucks, as well as carmaker General Motors, credit-card giant Visa and oil majors Chevron and Exxon Mobil.
The monthly jobs report for April, due Friday morning, could give a glimpse of how Trump's trade war is affecting the labor market. The U.S. economy likely added 130,000 jobs, according to economists polled by the Journal, down from the 228,000 that were added in March.
Markets have swung wildly in recent weeks in response to comments and social-media posts from Trump administration officials about trade. While the worst fears of trade-war fallout haven't been realized, there is still substantial concern about how Trump's tariffs will affect the economy, said Michael Arone, managing director at State Street Global Advisors.
"There remains a fair amount of headline risk," Arone said.
Write to Alexander Osipovich at alexo@wsj.com and Angus Berwick at angus.berwick@wsj.com
(END) Dow Jones Newswires
April 28, 2025 16:39 ET (20:39 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
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