The Nasdaq Composite Just Disrupted the Tariff Narrative by Doing This
Key Points
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The markets are continuing to celebrate the strong results from Meta Platforms and Microsoft. But Apple and Amazon are not participating in the gains.
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China could be ready to come to the negotiating table with Washington, D.C. on tariffs.
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Markets Extend Gains
Today’s tech-fueled rally has gained more steam as corporate America continues to navigate the tariff impacts. Here’s a look at where things are headed to end the final trading day of the week:
Dow Jones Industrial Average: Up 606.54 (+1.5%)
Nasdaq Composite: Up 279.91 (+1.6%)
S&P 500: Up 90.88 (+1.6%)
For the week, the Nasdaq Composite is headed for a 3.5% advance.
Bullish NFLX
Netflix (Nasdaq: NFLX) stock has been shining since reporting its earnings in mid-April. Today the stock surpassed the $1,155 per share level to clinch a new record high, fueling speculation of a future stock split. Shares of the content streamer have been rising for nearly a dozen trading sessions in a row throughout all of the market and economic uncertainty, emerging as what could prove to be a recession-proof stock.
Also in technology, Morgan Stanley is bullish on Taiwan Semi stock after Microsoft and Meta showed no signs of slowing down AI capex in the face of tariff uncertainty.
Markets Hold Gains
During what can only be explained as a volatile market cycle, stocks are holding onto their gains today, as each of the major stock market averages rises by approximately 1%. Magnificent Seven stocks remain mixed, with Apple (Nasdaq: AAPL) and Amazon (Nasdaq: AMZN) preventing the Nasdaq Composite from further gains. Over the past five-day stretch, the Nasdaq Composite has added 3% but remains lower by 7% year-to-date.
Gamer stock Take-Two Interactive (Nasdaq: TTWO) stock is a big loser today, sinking 8% after indicating that its ‘Grand Theft Auto VI’ release will be delayed.
Labor Market Shows Resilience
On the economic data front, April’s widely anticipated employment results are in and can be summed up in a word: resilience. U.S. payrolls expanded by 177,000 last month. While results were slower than March payrolls, economists were already expecting that. Besides, April’s performance surpassed the consensus estimates of 133,000 new payrolls added to the labor market.
Several positive catalysts are paving the way for market gains today, not least a technology sector that keeps on giving. The markets are in relief mode, extending yesterday’s gains in yet another technology-fueled positive session. Big Tech has singlehandedly managed to pop the tariff balloon, with bullish capex plans and unrelenting demand for AI solutions, resulting in quarterly profits that have surpassed expectations. The Technology sector is fueling the Nasdaq Composite higher while the S&P 500 extends its winning streak further. The Dow Jones Industrial Average is adding over 400 points on the session as the buying spree spreads. Each sector of the economy is higher with the exception of a modest decline in energy stocks.
Meta Platforms (Nasdaq: META) and Microsoft (Nasdaq: MSFT) are all being celebrated, with gains of about 3% each, for shifting the market focus from tariffs to fundamentals on stronger-than-expected quarterly results. Apple (Nasdaq: AAPL) also beat estimates but is the outlier today, with the iPhone maker’s stock falling 4.7% in response to a couple of tariff-related Wall Street downgrades. Amazon (Nasdaq: AMZN) has most recently turned lower after expressing worries about the tariff climate up ahead.
Yet another tailwind has been a seemingly willingness on the part of Beijing to come to the table to discuss tariffs with the Trump administration, potentially bringing clarity to the one wildcard trade war relationship.
Here’s a look at the performance as of morning trading:
Dow Jones Industrial Average: Up 468 (1.15%)
Nasdaq Composite: Up 236 (+1.2%)
S&P 500: Up 69.25 (+1.2%)
Market Movers
Apple’s declines come on the heels of an analyst downgrade from Jefferies, which cut the stock to an “underperform” rating after the company revealed tariffs will cost the company’s bottom line to the tune of $900 million. Apple is leaning more heavily on production from India in a pivot away from tariff-heavy China. Also, Rosenblatt securities lowered its rating on Apple to a “neutral” rating from “buy.”
Block (NYSE: XYZ) stock, formerly known as Square, is shaving off 21% of its value today after its Q1 results missed expectations as growth stagnates.
DexCom (Nasdaq: DXCM) is soaring by 13.5% today after reporting its Q1 results.
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