US stocks rebounded on Tuesday (Apr 22) as a spate of quarterly earnings reports and hints at the de-escalation of US-China trade tensions brought buyers in from the sidelines.
A broad rally boosted all three major US indices by more than 2 per cent, as investors looked past Trump’s ramped up rhetoric against Fed Chair Jerome Powell, who is widely considered a stabilising force for the markets.
Minneapolis Fed President Neel Kashkari, when asked about Trump’s attacks on Powell, said the Fed’s independence is “foundational” to better economic outcomes.
Having been battered for weeks by the White House’s erratic and multi-front tariff disputes, the S&P 500 is currently about 14.4 per cent below its record closing high reached on Feb 19.
Treasury Secretary Scott Bessent said that while trade negotiations with Beijing will likely be “a slog”, he believes that there will be a de-escalation of US-China trade tensions.
“The roller coaster continues,” said Ryan Detrick, chief market strategist at Carson Group in Omaha. “Some thawing of the aggression (between) US and China, thanks to Bessent’s comments, helped push things higher.”
“Washington understands that the uncertainty around tariffs is hurting markets and maybe we can get some type of positive news going forward on the trade front,” Detrick added
Those uncertainties helped prompt the International Monetary Fund to slash its forecasts for US economic growth to 1.8 per cent in 2025, citing the impact of US tariffs, now at 100-year highs.
First-quarter earnings season gathered steam.
So far, 82 of the companies in the S&P 500 have reported. Of those, 73 per cent have beaten expectations, according to LSEG.
Analysts now see aggregate S&P 500 earnings growth 8.1 per cent for the Jan – March period, down from the 12.2 per cent growth forecast at the beginning of the quarter, per LSEG.
“Current earnings are showing a continuation of good fundamentals, which is not a surprise,” said Bill Merz, head of Capital Market Research at US Bank Wealth Management, Minneapolis, who added that investors are parsing corporate guidance for “clarity on what companies are planning to do in response to tariff policy.”
Shares of industrial conglomerate 3M jumped after the company posted better-than-expected first-quarter profit expectations, though it flagged a likely hit to 2025 profit from tariffs.
