Stocks Soar to Record Highs Amidst Trade War Uncertainty!

2025-08-08 18:00:36.268

Stocks surged on Wall Street Friday, marking the third weekly gain in four weeks. The S&P 500 climbed 0.7%, nearing record highs, erasing losses from the previous week. The Dow Jones Industrial Average rose 223 points (0.5%), and the Nasdaq added 0.8%, reaching a new all-time high. Tech companies, including Nvidia (+0.6%) and Apple (+4.3%), significantly contributed to the market's gains. Strong second-quarter earnings reports from Gilead Sciences (+9%) and Expedia Group (+2.7%) also boosted investor confidence. Despite positive corporate earnings, concerns remain about the impact of tariffs on corporate profits. President Trump's trade war and the Federal Reserve's interest rate policy dominated the week's focus. Trump's imposition of higher import taxes and the Fed's decision to hold interest rates steady due to economic uncertainty were key factors. Pressure on Fed Chair Jerome Powell to cut rates increased with Trump's nomination of Stephen Miran to the Fed's board. Miran's expected support for lower rates increases the likelihood of a rate cut at the September meeting, which is largely anticipated by Wall Street. Treasury yields rose, with the 10-year Treasury reaching 4.28% and the 2-year Treasury at 3.75%. The expectation for a rate cut follows recent economic indicators suggesting weakening economic growth, including higher inflation in June and reduced hiring in July. The Fed aims to balance inflation control and full employment. Lower interest rates could stimulate the economy but might also exacerbate inflation. Further economic data releases next week will provide more insights into inflation and retail sales. UBS Global Wealth Management anticipates continued stock market support but acknowledges vulnerabilities to tariff, economic, and geopolitical risks. Asian markets were mostly down, except for Tokyo's Nikkei, which rose 1.9% following a tariff agreement with the U.S. European markets showed mixed results.