2025 Week 18

1. Market Rebound Driven by Tech Momentum

After a weak start on Monday, U.S. equity markets posted a powerful recovery throughout the week. The NASDAQ led the way with a 6.7% gain, followed by a 4.6% rise in the S&P 500 and a 2.5% uptick in the Dow. Much of the strength came from robust earnings in the technology sector, helping reverse last week's pullback.

Key Takeaway: Strong tech earnings reignited investor confidence and propelled major indexes sharply higher.

2. Tech Sector Outpaces Broader Market

Technology stocks were the standout performers, with the sector gaining nearly 8% for the week within the S&P 500. In contrast, defensive sectors such as consumer staples lagged, with a weekly decline of over 1%. This divergence reflects renewed investor appetite for growth amid solid earnings and improving sentiment.

Key Takeaway: Tech leadership returned with force, highlighting investors’ renewed growth bias.

3. Upward Revisions in Earnings Expectations

Earnings season reached its peak with better-than-expected results lifting analyst forecasts. As of Friday, projected Q1 earnings growth for S&P 500 companies stood at 10.1%, up from 7.0% the prior week, according to FactSet. The upward trend reinforces confidence in corporate profitability despite macro uncertainties.

Key Takeaway: Earnings revisions are turning positive, offering fundamental support to the market rally.

4. Bond Yields Retreat on Calmer Policy Signals

The yield on the U.S. 10-year Treasury fell to around 4.26% by Friday, a significant decline from its April 11 intraday high of 4.59%. Declining yields reflect reduced volatility and fading concerns over Fed independence, as political rhetoric around monetary policy cooled during the week.

Key Takeaway: Bond markets steadied, with falling yields signaling improving confidence in policy stability.

5. IMF Cuts Growth Outlook Amid Tariff Concerns

The International Monetary Fund downgraded its 2025 global GDP forecast to 2.8% from 3.3%, attributing the revision to rising tariff-related risks. Projections for 2026 were also trimmed to 3.0%. Although the U.S. administration softened its tone on trade this week, the damage to growth expectations may linger.

Key Takeaway: Trade tensions are weighing on long-term global growth forecasts despite recent diplomatic progress.

6. Consumer Sentiment Slips Again

The University of Michigan’s final April reading came in at 52.2, down from 57.0 in March and significantly below the 74.0 level recorded at the end of 2024. Consumers cited concerns over rising tariffs and inflation, suggesting headwinds to future spending momentum.

Key Takeaway: Deteriorating consumer confidence could dampen consumption trends heading into summer.

7. Gold Rally Pauses at All-Time Highs

Gold briefly topped $3,400 per ounce early in the week before settling around $3,310 on Friday, finishing slightly lower for the week. Still, the metal remains up 24% year to date, supported by safe-haven demand and lower real yields.

Key Takeaway: Gold remains in a long-term uptrend despite this week’s modest pullback.

8. Trade Rhetoric Cools, Policy Clarity Emerges

A series of developments suggested a softening U.S. stance on global trade, including potential tariff rollbacks and positive bilateral talks with China, India, and South Korea. While uncertainty remains, markets interpreted these moves as signals that the peak in trade-driven volatility may have passed.

Key Takeaway: Markets welcomed signs of easing trade tensions, reducing policy-related risks.

9. Fed Rate Cut Hopes Build as Growth Moderates

While the Fed is expected to hold steady at its May 7 meeting, dovish signals are growing. With tariffs likely capping GDP growth between 1.5%-1.7% and core inflation peaking near 4%, market participants now anticipate 2–3 rate cuts by year-end, especially if labor data cools.

Key Takeaway: The Fed appears on track for summer rate cuts amid moderating growth and policy uncertainty.

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