The stock market rebounded last week, but came well off highs amid continued whipsaw action. President Donald Trump, citing "yippy" bond markets, on Wednesday announced he was scaling back higher tariffs for 90 days — except for China — triggering the best gains in years for the major indexes. But stocks fell back with tariffs and tariff uncertainty high. Long-term Treasury yields backed off highs but still had a big gain, reflecting and intensifying market unease. JPMorgan Chase, Wells Fargo kicked off bank earnings with concerns about the economy, while Delta Air Lines warned on tariff impacts, while Walmart pulled guidance. UnitedHealth Group and other health insurers jumped on higher Medicare Advantage payments. Consumer and producer prices unexpectedly fell, but inflation expectations are skyrocketing.
Stock Market Has One Big Day
The stock market skyrocketed Wednesday on the partial Trump tariff pause, with the Nasdaq boasting its second-best percentage gain ever. The major indexes pared some gains, but still rose strongly for the week, though small caps ended lower. Treasury yields spiked higher while the U.S. dollar tumbled, a worrisome sign for America's traditional safe-haven, reserve currency status.
Inflation Tame As Trade War Hits Demand
The March consumer price index unexpectedly edged lower vs. February, bringing the 12-month CPI inflation rate down to 2.4% from February's 2.8%. Core CPI inflation cooled to 2.8%, a four-year low. But a big factor was tumbling airfares and hotel rates, reflecting plunging travel demand. The producer price index fell a surprise 0.4%, led by sliding energy prices amid recession fears, but core PPI dipped 0.1%. Year over year, PPI inflation slowed to 2.7% and core PPI to 3.3% vs. expectations of a pickup. Fed rate cut odds didn't change much ultimately, as Fed officials voiced concern about taking action before tariffs are settled, fearing the inflation impact. Meanwhile, the University of Michigan's consumer sentiment fell far more than forecast, with the expectations gauge diving to a 45-year low. The report's one-year inflation expectation spiked to 6.7%, which would be the highest inflation rate since 1981.
Banks Cautious About Economy
The CEOs of JPMorgan Chase, Wells Fargo and BlackRock issued cautious statements about the economic outlook for the year as the banks released Q1 results Friday. JPMorgan's Jamie Dimon said clients have become "more cautious" amid the increased market volatility from geopolitical and trade-related tensions. He added that "the economy is facing considerable turbulence," citing tariffs, trade wars, sticky inflation, deficits, high asset prices and volatility. Potential positives include tax reform and deregulation. Wells Fargo's Charlie Scharf said he supports President Trump's willingness to look at barriers to fair trade, but there are risks with such significant actions. Wells expects continued volatility, uncertainty, and is preparing for a slower economic environment this year, but with a lot of uncertainty. BlackRock's Larry Fink said the U.S. may already be in a recession. JPMorgan and Bank of New York Mellon topped Q1 estimates. Wells Fargo and BlackRock beat earnings views but fell short of revenue forecasts.
TSMC Sales Positive For Chipmakers
Taiwan Semiconductor Manufacturing, known as TSMC, reported better-than-expected sales for the month of March and full first quarter. TSMC sales rose 39% year over year in Q1. The news bodes well for its customers including AI chip leader Nvidia. In other news, the Trump administration has backed off plans to impose curbs on sales of Nvidia's H20 artificial intelligence chip in China. Analysts say that lifts an overhang on Nvidia stock because increased trade restrictions had been expected.
Health Insurers Get Big Win
Humana, UnitedHealth Group and Aetna parent CVS Health and other health insurers rallied after the Centers for Medicare & Medicaid Services (CMS) raised Medicare Advantage payments significantly late Monday. The Trump administration's 5.06% increase for fiscal 2026 is substantially higher than the 2.23% proposed by CMS under the Biden Administration. The Trump administration will continue a move to limit certain billing practices, with that phasing in over three years to 2026.
Delta EPS Beats, But Growth 'Stalled'
Delta Air Lines reported a 2% EPS gain, slightly beating lowered Q1 views. Revenue rose 3% to $12.98 billion, falling short. But the carrier guided lower on Q2, saying that "growth has largely stalled" amid global uncertainty around trade. The airline plans to reduce capacity growth to align supply with demand. Delta also pulled its full-year outlook amid "the lack of economic clarity." Delta rose in a volatile week.
Google Unveils New Chip At Cloud Event
At Cloud Next 2025, Google-parent Alphabet unveiled a seventh-generation, internally developed processor chip and new artificial intelligence services. Also, Google said it will make its global communications network available to enterprise customers for the first time. Google said its Ironwood chip, more than 10 times more powerful than its predecessor, will be available to cloud customers in late 2025. It updated plans to offer Nvidia accelerators. Google said its cloud business will be among the first to offer Nvidia's upcoming Vera Rubin accelerators. Further, Google said customers will be able to build applications at their own internal data centers using its Gemini family of AI models via a distributed cloud platform.
Stock Market News In Brief
BYD guided first-quarter net income up 86% to 119% vs. a year earlier, much higher than analysts expected. At the top end, that would be in line with forecasts for Tesla's net income. The world's largest EV maker also launched the Han L and Tang L, with ultrafast charging capability and a driver-assist system with Lidar, priced very aggressively. Shares rose strongly for the week.
Walmart pulled first-quarter operating profit guidance, citing tariff uncertainty. The retail giant had forecast a 0.5%-2% gain in adjusted operating income. It still sees 3%-4% sales growth in the April-ended quarter.
Cal-Maine reported a 246% spiked while revenue growth accelerated again, to 102%. Bird flu and related culling sent egg prices soaring in the February-ended fiscal third quarter. But those both missed estimates. Egg prices are starting to tumble. Shares were up 2.8% Friday midday.
U.S. Steel plunged Thursday after President Trump said the "very special company" should not be bought by Japan's Nippon Steel. Trump had wavered on the fate of Nippon Steel's U.S. Steel bid.
