US stocks jumped on Friday, capping a chaotic week on Wall Street that saw massive swings in the bond market amid concerns about President Donald Trump’s trade war with China. The S&P 500 rose 1.8%, while the Dow Jones Industrial Average gained 619 points, or 1.6%. Despite some easing of pressure in the US bond market, investors remain cautious due to rising tensions between the world’s two largest economies.
The yield on the 10-year Treasury topped 4.58% earlier in the day, a significant jump that can drive up interest rates and indicate stress in the financial system. However, yields eased back later as the afternoon progressed, falling to 4.48%. This week’s surge in US Treasury yields is unusual, given that yields typically fall when fear is high.
Investors may be selling their US bonds due to the trade war, or hedge funds may be raising cash to cover other losses. The value of the US dollar also fell against major currencies, while gold prices rose to a record as investors sought safer havens.
China announced new tariffs on US products, escalating tensions between the two nations. This could lead to widespread damage and a possible global recession, even after Trump’s recent pause on some tariffs. Rising uncertainty is eroding consumer confidence in the US, which could affect spending and the economy.
A survey by the University of Michigan found that US consumers’ sentiment is falling sharply, with expectations of inflation rising to 6.7% in the year ahead. This could create a feedback loop that pushes inflation higher, making it harder for the Federal Reserve to cut interest rates if needed.
The stock market abroad saw scattered gains and losses, with indexes in Germany, London, Japan, and Hong Kong moving in different directions. Overall, Wall Street is bracing for more volatility as trade tensions remain high.
Source: https://apnews.com/article/stocks-markets-tariffs-china-trump-dollar-358cac8ceb151aba131b7b2408a6046f