Wall Street extended its gains to a ninth straight day Friday, marking the stock market’s longest winning streak since 2004 and reclaiming the ground it lost since President Donald Trump escalated his trade war in early April. Canada’s main stock index also gained, closing at a one-month high.
The rally was spurred by a better-than-expected report on the U.S. job market and resurgent hope for a ratcheting down in the U.S. trade showdown with China.
The S&P 500 climbed 1.5%. The Dow Jones Industrial Average added 1.4%, and the Nasdaq composite rose 1.5%. The S&P/TSX composite index ended up 1%.
The gains were broad in the U.S. Roughly 90% of stocks and every sector in the S&P 500 advanced. Technology stocks were among the companies doing the heaviest lifting. Microsoft rose 2.3% and Nvidia rose 2.5%. Apple, however, fell 3.7% after the iPhone maker estimated that tariffs will cost it $900 million.
Employers added 177,000 jobs in April. That marks a slowdown in hiring from March, but it was solidly better than economists anticipated. However, the latest job figures don’t yet reflect the effects on the economy of Trump’s across-the-board tariffs against America’s trading partners. Many of the more severe tariffs that were supposed to go into effect in April were delayed by three months, with the notable exception of tariffs against China.
“We’ve already seen how financial markets will react if the administration moves forward with their initial tariff plan, so unless they take a different tack in July when the 90-day pause expires, we will see market action similar to the first week of April,” said Chris Zaccarelli, chief investment officer for Northlight Asset Management.
The S&P 500 slumped 9.1% during the first week of April as Trump announced a major escalation of his trade war with more tariffs. The market has now clawed back its losses since then, helped by a string of resilient earnings reports from U.S. companies, hopes for de-escalation of trade tensions with China and expectations that the Federal Reserve will still be able to cut rates a few times this year.
The benchmark index is still down 3.3% so far this year, and 7.4% below the record it reached in February.
All told, the S&P 500 rose 82.53 points to 5,686.67. The Dow gained 564.47 points to 41,317.43, and the Nasdaq added 266.99 points to 17,977.73.
The TSX ended up 235.96 points at 25,031.51, its highest closing level since April 2. For the week, the index was up 1.3%.
Trade tariff developments, as well as the strength of the U.S. jobs report and corporate earnings “suggest that we’re moving further away from the worst case scenarios,” said Angelo Kourkafas, senior investment strategist at Edward Jones. “We’re looking at a potential slowdown, not a recession, in the U.S., or Canada for that matter.”
Industrials in Toronto rose 2.1% as Canadian National Railway Co added 5.7% after its quarterly results beat estimates.
Technology was up 1.6% in Canada and heavily weighted financials ended 1.2% higher.
Imperial Oil Ltd posted its highest-ever first-quarter earnings, driven primarily by stronger margins in its refining and fuel sales business. Its shares rose 1.2%.
The energy sector added 0.9% even as U.S. crude oil futures settled 1.6% lower.
The materials group was one of just two major sectors to end lower on the TSX, falling 0.4%, as the price of gold edged down.
Auto parts supplier Magna International Inc missed quarterly earnings estimates and said it plans to implement cost-saving measures to cushion the hit from tariffs. Its shares ended 5.8% lower.
The U.S. job market is being closely watched for signs of stress amid trade war tensions. Strong employment has helped fuel solid consumer spending and economic growth over the last few years. Economists are now worried about the impact that taxes on imports will have on consumers and businesses, especially about how higher costs will hurt hiring and spending.
The economy is already showing signs of strain. The U.S. economy shrank at a 0.3% annual pace during the first quarter of the year. It was slowed by a surge in imports as businesses tried to get ahead of Trump’s tariffs.
The current round of tariffs and the on-again-off-again nature of Trump’s policy has overshadowed planning for businesses and households. Companies have been cutting and withdrawing financial forecasts because of the uncertainty over how much tariffs will cost them and how much they will squeeze consumers and sap spending.
Hopes remain that Trump will roll back some of his tariffs after negotiating trade deals with other countries. China has been a key target, with tariffs of 145%. Its Commerce Ministry said Beijing is evaluating overtures from the U.S. regarding the tariffs.
Investors had a relatively quiet day of earnings reports following a busy week on Wall Street. Exxon Mobil rose 0.4%, recovering from an early slide, after reporting its lowest first-quarter profit in years. Rival Chevron rose 1.6% after it also reported its smallest first-quarter profit in years.
Treasury yields rose in the bond market. The yield on the 10-year U.S. Treasury rose to 4.31% from 4.22% late Thursday.
The Associated Press, Reuters, Globe staff