The stock market soared on Tuesday as the White House indicated that a major trade deal announcement was imminent. The Dow Jones Industrial Average gained 300.03 points, or 0.75%, to close at 40,527.62. The S&P 500 climbed 0.58%, reaching 5,560.83, and the Nasdaq Composite advanced 0.55% to settle at 17,461.32.
Both indexes extended their winning streaks to six consecutive days. Commerce Secretary Howard Lutnick commented that a deal, pending approval from a foreign prime minister and parliament, was nearly finalized. This statement boosted market sentiment, particularly among stocks affected by the trade war.
General Motors (GM) experienced fluctuations throughout the day, ending slightly down by 0.6%, while Apple inched up 0.5%. Despite concerns from a statement by White House Press Secretary Karoline Leavitt regarding potential tariff surcharges, shares of related companies managed to recover some losses. Ross Mayfield, an investment strategist at Baird, remarked, “The S&P 500 could trade between 5,100 and 5,700 while investors await trade progress.” This week also saw intense market activity due to a flood of earnings reports, with about one-third of S&P 500-listed firms scheduled to post results.
John Paulson, known for his success during the financial crisis, predicted gold prices could rise to $5,000 an ounce by 2028, driven by trade tensions and central bank purchases. Gold recently hit an all-time high at $3,500.05 an ounce.
Stock market surges on trade optimism
Several economists now anticipate that the U.S. economy contracted in Q1 of 2025. Goldman Sachs revised its outlook, predicting a -0.8% annualized GDP change, influenced by a record $162 billion goods trade deficit in March. Similarly, Jefferies and BNP Paribas adjusted their forecasts downward.
Netflix is poised for an eighth straight positive session following a significant earnings report on April 17. The stock has surged nearly 20% this month, making it one of the best performers in the S&P 500. Gilead Sciences agreed to pay $202 million to settle claims of unlawfully using speaker programs to funnel kickbacks to doctors for prescribing its HIV drugs.
The settlement includes payments to the U.S. government and various states. Several stocks hit new 52-week lows on Tuesday, including notable names in different sectors. Conversely, shares of a global consumer services company traded at all-time highs.
Wolfe Research indicated that near-term economic indicators could signal stagflation, which might pressure equities further. Chief Investment Strategist Chris Senyek noted potential weaker payroll reports on the horizon due to tariff policies. Deutsche Bank’s Binky Chadha suggested the S&P 500 could fall as low as 4,600 amidst tariff uncertainties, while RBC Capital Markets predicted that market pullbacks would be short-lived despite expected volatility for the rest of the year.
