On Thursday, the upward trajectory of Wall Street persisted, propelled by better-than-anticipated earnings reports from U.S. corporations. However, numerous CEOs expressed reservations on the sustainability of these gains, given the unpredictability triggered by President Donald Trump’s trade policies. In particular, the S&P 500 escalated by 2%, landing within just 11% of its all-time peak established earlier in the year. The Dow Jones Industrial Average also experienced a 486-point surge, approximating a 1.2% increase, while the Nasdaq composite experienced a significant 2.7% leap.
Tech companies have made some of the most substantial gains during this bull run, with standout performances particularly noted in ServiceNow. Being a powerful AI establishment that aids businesses in customer management, the firm posted a higher than expected profit for the opening sector of 2025. Furthermore, ServiceNow’s stocks rocketed by 15.5% following an optimistic forecast on upcoming subscription revenue that placed them ahead of some analysts’ previsions.
In the airline industry, Southwest Airlines also demonstrated a better performance than perceived for the first quarter of the year. Uncertainty about the economic outlook, however, prompted the airline to retract some of its annual financial expectations. Despite the market turbulence, Southwest’s shares climbed in the later trading hours, eventually closing up by 3.7%.
Southwest’s competitor, American Airlines, echoed this sentiment, withdrawing its yearly financial predictions while it monitors the economic situation. Despite the volatility, the company’s stocks rose by 3.1% after exceeding quarterly profit expectations. The oscillating market trend has been attributed largely to the unpredictable nature of Trump’s fluctuating tariff policies, causing difficulty in financial forecasting.
Across the business landscape, companies have grappled with uncertainty while trying to make precise financial forecasts due to the erratic implementation of the U.S. President’s tariffs. The stock market has responded positively during periods of perceived softening in Trump’s tariff stance. However, these fleeting episodes of optimism were undercut as China, the world’s second-largest economy, refuted any claims of ongoing tariff negotiations with the U.S., likening talk of progress to ‘trying to catch the wind’.
In recent times, the market’s drastic fluctuations have put investors in a complicated position trying to adapt to the constantly evolving conditions. Analysts note that unless clarity on tariff policies is achieved, the market will most likely continue its roller-coaster trend. The common anticipation is that these tariffs could trigger economic downturn unless overturned.
In preparation for expected higher costs due to tariffs, American households have had to rethink their financial strategies. Simultaneously, the International Monetary Fund top executive called upon nations to swiftly address and resolve these trade conflicts, citing a potential threat to worldwide economic growth. Despite the prevalent uncertainty regarding the near future, many U.S. firms have been posting profits that exceed analysts’ expectations for the beginning of 2025, albeit with caution about the forthcoming period.
Hasbro, a renowned toy manufacturing firm, has emerged as one of the market winners, with a 14.6% stock leap following better-than-anticipated profit and revenue for the recent quarter. This rise was attributed to substantial growth patterns observed across several of their products including the Magic: The Gathering game.
Texas Instruments, a leading semiconductor company, was also among companies that posted higher than expected profits, triggering a 6.6% increase in its shares. On the other hand, even though Procter & Gamble reported stronger results for the latest quarter than expected, the company witnessed a 3.7% decrease in its stock prices as its revenue fell short of forecasts.
Adding to its challenges, Procter & Gamble reduced its profit growth projection for the current fiscal year. The company pointed towards increased costs for commodities as a significant contributor to an expected $200 million decline in its earnings this fiscal year.
On the other end of the financial spectrum, the yield on the 10-year Treasury dropped from 4.40% to 4.30% on Wednesday, a change fueled by expectations that the Federal Reserve may lower interest rates later this year to mitigate potential damage from tariffs.
Falling yields came after the release of a report that slightly more U.S. workers sought unemployment benefits the previous week than anticipated. This unexpected increase in unemployment claims fuels concerns about economic stability.
Another set of data pointed to weakening in the property market, as March sales of previously owned homes decreased by more than was expected. All these factors combined have added to the complexities facing businesses and investors as they attempt to navigate an uncertain financial landscape.
While optimism about stronger-than-expected profits for the initial phase of 2025 has driven the recent rally on Wall Street, caution prevails due to the looming uncertainty around the economic impact of President Trump’s trade war. Companies and analysts alike are eagerly anticipating a clearer picture of the economic scenario before making any definite predictions on future trends.