ISLAMABAD: Wall Street is winding down what could be its strongest month since 2023, despite mixed earnings reports and ongoing concerns over tariffs imposed by former President Donald Trump.
On Friday, the S&P 500 slipped 0.2% in morning trading, while the Dow Jones Industrial Average inched up 13 points and the Nasdaq composite declined by 0.5%. Investors remain cautious as companies navigate the economic uncertainty caused by fluctuating trade policies.
The retail sector faced pressure as Gap’s shares dropped over 21% after the company warned that tariffs on imports from China and other countries could add $300 million in costs this fiscal year.
Despite reporting better-than-expected profits and revenue, the threat of escalating tariffs overshadowed the results.
Meanwhile, Ulta Beauty’s stock surged nearly 15% following strong sales and profit growth, with an optimistic revenue forecast for the year despite a “fluid” business environment described by its CEO.
Tariff Concerns Weigh on Market Sentiment
The primary focus remains on Trump’s tariffs, which have unsettled markets for months. While Trump paused many tariffs on China and the European Union earlier this week, a U.S. court blocked much of his sweeping tariff policy, fueling hopes for relief among investors.
However, tariffs still stand as the White House appeals the ruling, leaving the final outcome unclear.
Trump’s recent accusation that China is not honoring its trade agreement briefly rattled the markets but had a limited lasting impact.
Companies like American Eagle Outfitters have withdrawn their financial outlooks due to economic uncertainty, reflecting broader investor wariness. On the other hand, firms like Costco and Red Robin Gourmet Burger delivered positive quarterly results, contributing to mixed but generally optimistic market performance.
Inflation and Consumer Sentiment Show Signs of Stability
In the bond market, Treasury yields remained mostly steady as inflation data for April came in slightly below expectations.
Consumer sentiment improved more than anticipated in May, helped by tariff pauses, though concerns about the future persist. The Federal Reserve has kept interest rates steady this year to better assess tariff effects on inflation and economic growth.
Global markets showed mixed results, with European indexes fluctuating and Asian markets experiencing declines, as investors weigh ongoing geopolitical and economic risks.
