Wall Street Rebounds Slightly on Hopes of Tariff Flexibility

After a volatile session, U.S. stock markets closed slightly higher on Friday, buoyed by comments from President Donald Trump that raised hopes for reduced tariff pressure.

The three major Wall Street indexes posted moderate gains. The Dow Jones Industrial Average, which tracks 30 large corporations, rose 0.08% to 41,985.35 points. The S&P 500, which includes the most valuable companies, also gained 0.08% to 5,667.56 points, while the Nasdaq Composite climbed 0.52% to 17,784.05.

Trump stated that there would be flexibility in tariffs and that his top trade official plans to speak with his Chinese counterpart next week. He also reiterated his strategy of using tariffs to reduce the U.S. trade deficit with China.

Uncertain Outlook

Midweek, investor sentiment was dampened by the Federal Reserve’s cautious stance on the economy. While the Fed acknowledged economic resilience, it warned that tariffs could pressure growth and fuel inflation.

Chicago Fed President Austan Goolsbee cautioned that it remains unclear how much Trump’s tariff plans will contribute to persistent inflation, adding that additional tax and economic factors could prompt the Fed to react.

Meanwhile, New York Fed President John Williams stated that the central bank’s monetary policy remains appropriately positioned given the current economic conditions and an uncertain outlook.

Market Volatility

Friday’s session was marked by “triple witching,” when $4.5 trillion in stock index futures, options, and individual stock options expired, leading to significant portfolio adjustments.

Early trading was also pressured by sharp losses in FedEx (-6.45%), which slashed its earnings outlook citing “weakness and uncertainty in the industrial economy,” and Nike (-5.46%), which warned that quarterly sales would fall short of expectations.

Despite these factors, all three indexes posted weekly gains. The Dow Jones led with a 1.20% rise, followed by the S&P 500 with a 0.51% increase, while the tech-heavy Nasdaq Composite edged up 0.17%.