US stock indices had a mixed close on Thursday. The Dow lost 0.7% as profit-taking and sector rotation took hold, particularly in industrials and some tariff-sensitive names. In contrast, the S&P 500 edged up 0.1%, while the Nasdaq Composite rose 0.2%, both setting new all-time closing highs.
This marked the S&P 500’s 13th record close of the year, with four of those notched this week. The Nasdaq Composite continued its impressive winning run, logging its third record close this week after breaking above the 21,000 level on Wednesday. Tech stocks, led by the belief in extraordinary productivity gains to come from the continued adoption of AI, helped underpin these gains, even as the broader market showed signs of fatigue.
Source: TN Trader
US stock index futures were a touch firmer across the board in early trade on Friday. The second quarter earnings season has got off to a good start, while this week’s trade deals have brought some clarity over tariffs. The general expectation is that tariffs will settle around 15-20%.
Investors see this as a considerable improvement on some of the 25-50%-plus tariffs first threatened by President Trump back in early April. But it is worth remembering that this takes tariffs back up to levels last seen around 100 years ago. In addition, it’s still unclear who will be paying these extra levies.
Will it be the exporter, the importer, the manufacturer or the consumer? It appears for now that investors believe it will be a little bit from everyone, so that’s ok then. In the meantime, the European Union and China are yet to agree terms with the US. Meanwhile, General Motors announced that they took a big hit from tariffs, as did Volkswagen this morning.
Nevertheless, US equity benchmarks continue to hover at, or near, record levels. With tariff-related headlines swirling, the tone heading into the final session of the week is one of cautious optimism. Investors continue to balance strong index-level performance against growing geopolitical and sector-specific headwinds.
Even the ongoing spat between President Trump and the Federal Reserve Chair, Jerome Powell, failed to raise investor concerns for long. The VIX continued to drift downwards this morning. The index, often seen as a gauge of investor anxiety, continues to suggest that investors anticipate a stable risk environment as the week draws to a close.
