Last night, U.S. indexes returned to their early April levels, when former President Donald Trump first introduced his tariff measures. Since then, markets have experienced significant volatility. The key takeaway is that the White House appears to have retreated in response to the market reaction - likely to avoid two potentially damaging outcomes: a loss of control over financial market dynamics, and a broader political backlash from the American electorate.
 
This reversal, which included a renewed focus on tariffs targeting China specifically, may have marked a short-term low for equities back on April 8. At least, that’s the view of the more optimistic voices on Wall Street. Earlier this week, however, sentiment remained fragile, with U.S. equities continuing to trend downward. Once again, it was Donald Trump who shifted the narrative, softening his stance with two key reversals: he walked back plans to fully implement tariff increases on China and indicated he would not pursue the removal of the Federal Reserve Chair, despite ongoing public criticism.
 
This more measured tone reassured investors. Many attributed it to the growing influence of Treasury Secretary Scott Bessent, a former hedge fund manager. “He’s becoming increasingly central in the administration—and that’s reassuring,” noted a prominent market participant.
 
Several external factors further supported the rebound in U.S. stocks. Trade talks are progressing with Japan, India, and South Korea, while discussions with China have reportedly resumed. Bloomberg reported that Beijing is even considering exempting certain U.S. imports to limit rising costs. While both sides initially adopted hardline positions, small gestures suggest negotiations remain possible.
 
Adding to the momentum, speculation has emerged around a potential Federal Reserve rate cut as early as June. Two central bankers hinted at this shift, contrasting with the more hawkish tone seen in previous months. Bond yields quickly reflected the change in expectations.
 
Investor sentiment has clearly shifted - from caution to tentative optimism. Hopes for trade resolutions are rising, the VIX volatility index is declining, bond yields are softening, and markets are recovering lost ground. The Fed’s dovish signals have contributed to a risk-on mood, even as macroeconomic indicators show signs of weakness and corporate earnings provide limited visibility.
 
Some may argue the optimism is premature: no formal trade deal has been signed, volatility remains elevated, and the Fed has made no firm commitments. But this week, markets are choosing to focus on the positives - Fed flexibility, diplomatic signals from Beijing, and the influence of Scott Bessent.
 
Quarterly earnings, while mixed, have taken a back seat. Reports from American Airlines, PepsiCo, Procter & Gamble, Intel, and T-Mobile US have been underwhelming. Still, investors were buoyed by results from Alphabet, which rose 4.6% in after-hours trading after reassuring markets about its AI-related investments.

The S&P 500 gained 2% in the US yesterday, bringing its weekly gains to 3.8%. The Nasdaq 100 rose 2.8% yesterday, or 5.24% over the week. Europe was more cautious but still performed well, with the Stoxx Europe 600 up 0.4% yesterday and 2.4% for the week.

In Asia-Pacific, Japan ended the week's last session on a high note, up 1.8%. South Korea rose 1%, Hong Kong 1.4% and Taiwan 2.7%. India, however, fell 0.9%, still reeling from the deadly attack by militants in Kashmir, which has exacerbated tensions with Pakistan. The Australian market is closed today for ANZAC Day. European leading indicators are bullish.

Today's economic highlights:

On the agenda today: The University of Michigan sentiment index in the US, retail sales in the UK, and business confidence in France. See the full agenda here.

  • USD/EUR: 0.8808 EUR
  • GOLD: $3,295
  • Crude Oil (BRENT): $64.74 (WTI) $61.84
  • United States 10 years: 4.307%
  • BITCOIN: $93,890

In corporate news:

  • Alphabet, parent company of Google, announced on Thursday a $70 billion share buyback program and raised its dividend by 5%, as the tech giant reported quarterly results that exceeded Wall Street expectations. Alphabet's autonomous taxis, operated by Waymo, could become available to the public in the future, according to CEO Sundar Pichai, as electric vehicle maker Tesla prepares to launch robotaxis in the US this year.
  • Apple plans to shift assembly lines for iPhones sold in the United States to India starting next year, the Financial Times reported Friday, citing sources familiar with the matter. The move comes as former President Donald Trump's trade war pushes the tech giant to move away from China.
  • Aon plc reported a year-on-year increase in its semiannual profit on Friday, but results came in below Wall Street expectations.
  • Centene reported first-quarter 2025 earnings that exceeded Wall Street estimates.
  • Digital Realty Trust raised its full-year funds from operations (FFO) forecast on Thursday, citing strong demand for data center services, which pushed its stock up 3.3% in after-hours trading.
  • Eastman Chemical projected second-quarter earnings below Wall Street estimates on Thursday and said it would cut spending in response to market volatility.
  • Gilead Sciences reported slightly better-than-expected first-quarter profit on Thursday, though revenue remained flat. Higher sales of HIV and liver disease drugs, combined with reduced expenses, offset declining cancer drug sales.
  • Hartford Insurance Group said on Thursday its first-quarter profit fell 16% due to mounting wildfire-related losses in California, although these were partially offset by increased investment income.
  • HCA Healthcare reported on Friday that its first-quarter profit rose nearly 9% as more patients underwent non-urgent procedures and sought medical care due to a rise in flu cases.
  • Intel said Thursday it expects second-quarter revenue to come in below Wall Street expectations, casting a shadow over the early tenure of new CEO Lip-Bu Tan and raising concerns about the impact of the US-China trade war.
  • Lazard announced a 9% decline in adjusted profit for the first quarter on Friday, as companies pulled back from deal-making amid economic turbulence linked to tariffs and the risk of a trade war.
  • Miners saw share prices fall ahead of Friday's market open, following a drop in gold prices due to signs of easing trade tensions between China and the United States. Newmont and Barrick Gold fell 2.1% and 1.7% respectively. South African miners Gold Fields dropped 2.1%, while AngloGold Ashanti and Sibanye Stillwater declined by more than 2%.
  • Phillips 66 reported a larger-than-expected first-quarter loss on Friday, citing lower refining margins amid maintenance and turnaround activity in the US refining sector.
  • Republic Services said Thursday its first-quarter revenue fell short of Wall Street estimates, as volume declines and bad weather more than offset price increases and cost-cutting initiatives.
  • Skechers abandoned its annual forecast on Thursday, citing economic uncertainty fueled by Donald Trump's trade policies. The footwear maker’s stock dropped 7% in after-hours trading.
  • T-Mobile added fewer mobile subscribers in the first quarter than Wall Street had expected, as competitors cut back on promotions in a saturated US telecom market, sending its shares down more than 5% in after-hours trading.
  • Verisign reported a 4.7% increase in first-quarter revenue on Thursday, driven by steady demand for domain registrations as businesses expand their online presence.
  • Weyerhaeuser beat Wall Street’s estimates for first-quarter earnings on Thursday, helped by strong domestic demand.
  • Ziff Davis has filed a lawsuit against OpenAI in Delaware federal court, accusing the Microsoft-backed AI company of improperly using its publications to train the ChatGPT chatbot.

Analyst Recommendations:

  • Alphabet : JP Morgan maintains its overweight recommendation and raises the target price from 180 to USD 195.
  • American Airlines Group : Fubon Securities maintains its buy recommendation and reduces the target price from 21.18 to USD 12.76.
  • Ameriprise Financial : Goldman Sachs maintains a neutral recommendation with a price target reduced from USD 538 to USD 533.
  • At&T : Barclays maintains its overweight recommendation and raises the target price from 27 to USD 30.
  • Churchill Downs : Citizens maintains its market outperform recommendation and reduces the target price from USD 157 to USD 144.
  • Comcast : BNP Paribas Exane maintains its underperform recommendation with a price target reduced from 31 to USD 30.
  • Digital Realty Trust : Jefferies maintains its buy recommendation and raises the target price from USD 190 to USD 193.
  • Factset Research Systems : Redburn Atlantic maintains its sell recommendation with a price target reduced from 390 to USD 380.
  • First Citizens Bancshares : JP Morgan maintains its overweight recommendation and reduces the target price from USD 2200 to USD 2100.
  • Graco : BNP Paribas Exane maintains its outperform recommendation and raises the target price from USD 85 to USD 92.
  • Intel : HSBC maintains its hold recommendation with a price target raised from 19.50 to USD 22. JP Morgan maintains its underweight recommendation and reduces the target price from 23 to USD 20.
  • Nasdaq : Goldman Sachs maintains its buy recommendation and raises the target price from USD 80 to USD 83.
  • Pepsico : Wells Fargo maintains its equalweight recommendation and reduces the target price from USD 150 to USD 140.
  • Procter & Gamble : Raymond James maintains its outperform recommendation and reduces the target price from 190 to USD 185.
  • Republic Services : Raymond James maintains its outperform recommendation and slightly reduces the target price from USD 258 to USD 257.
  • Sofi Technologies : Citizens initiates a market outperform recommendation with a target price of USD 17.
  • Ss&C Technologies Holdings : JP Morgan downgrades to neutral from overweight with a target price reduced from USD 90 to USD 86.
  • T-Mobile Us : RBC Capital maintains its sector perform recommendation and raises the target price from 260 to USD 265.
  • Texas Instruments : CITIC Securities Co Ltd maintains its add recommendation and reduces the target price from USD 220 to USD 181.
  • Union Pacific : Raymond James maintains its strong buy recommendation with a target price reduced from 260 to USD 258.
  • Webster Financial : JP Morgan maintains its overweight recommendation and reduces the target price from 60 to USD 55.