Why Are U.S. Stocks Making a Comeback?
The U.S. stock market is showing some small indication that it is recovering, but it may not last as strong tariff fears continue.
On Monday, the U.S. stock market was up, showing the first real signs of recovery in four weeks, with the Dow Jones gaining 353 points, or 0.85%.
The Nasdaq Composite grew by 0.31%, and the S&P 500 climbed by 0.64%. With all three major indices gaining for Monday, that sets the stage for Tuesday to be another positive day as well. There is some positive anticipation for the Federal Reserve’s interest rate decision this week, but most analysts and economists expect no change there.
Retail sales were up for the month of February, by 0.2%, says the U.S. Commerce Department. That is not as good as the estimated 0.6% figure from Dow Jones, but the economy can use any progress it gets. That puts the economy on better footing than it was in January, when the retail sales figures were down by 1.2%.
Negative about the Future
There are serious concerns about where the stock market is headed, despite the small uptick on Monday. Tariff fears persist, and investors are worried that President Donald Trump is not done with his new tariff policies and that other countries may retaliate further with harsher tariffs against the United States. These trade wars that have started between China and the U.S. as well as Canada and the U.S. are bound to affect the consumers directly in the near future. What has already hit the stock markets is certain to trickle down into all levels of society.
The state of the economy is so precarious that clothing retailer Forever 21 has closed up shop. The company just filed for bankruptcy, which would make it the second time it has done so in the past six years. Many of its stores are closing and its stock is being liquidated, but there is hope that a buyer will purchase what remains.
The price for Walmart (WMT) stock is up slightly over the past week, but the company has seen its stock price decline significantly over the last month. Erste Group analysts say that investors should hold on this one and not dip their toes in at the moment. It remains to be seen how the tariffs will affect big retailers like Walmart.
Meanwhile, Tesla (TSLA) and Nvidia (NVDA) continue their decline, down 4.79% and 1.76% respectively from the day before. These two stock market leaders indicate a poorly performing stock market overall, despite the small improvement on Monday.
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