Trade Hopes, Jobs Data & Market Momentum
U.S. Jobs Report in Focus
The week’s deluge of economic data culminated in the release of the Labor Department’s April employment report, a closely watched indicator of the U.S. economy’s direction. Amid rising uncertainty triggered by President Donald Trump’s hardline tariff policy, expectations had already been tempered.
Nonfarm payrolls were forecast to rise by 138,000, down significantly from March’s strong print of 228,000. The unemployment rate was expected to remain steady at 4.2%, while average hourly earnings were projected to climb by 0.3%, keeping the annual pace at 3.9%.
Despite a still-tight labour market – as companies remain hesitant to cut staff after COVID-era hiring challenges – there are clear signs of economic deceleration. Recent GDP data confirmed that the U.S. economy contracted in Q1, surprising analysts and reinforcing concerns that the effects of sustained trade conflict and policy shifts are beginning to take hold.
Trade Talk Optimism Lifts Markets
Equity markets found a lifeline late in the week when China’s commerce ministry revealed that it was evaluating the prospect of renewed trade negotiations with the U.S., contingent on the removal of unilateral tariffs.
The announcement sparked a rally in U.S. stock futures Friday morning in Asian trade:
- Dow futures gained 310 points (+0.8%)
- S&P 500 futures rose 33 points (+0.6%)
- Nasdaq 100 futures added 72 points (+0.4%)
These gains capped off a strong week for equities:
- S&P 500: +1.4%
- Dow Jones Industrial Average: +1.6%
- Nasdaq Composite: +1.9%
China stressed that talks must be based on “sincerity,” with the U.S. expected to cancel existing tariffs – currently at 145% on certain goods. Beijing has responded with retaliatory tariffs of 125%. Complicating matters, the Trump administration restored an executive order eliminating duty-free access for low-value shipments from China and Hong Kong.
These developments suggest that while sentiment has improved, any resolution to the trade standoff will likely be a protracted, high-stakes negotiation.
Earnings Season Highlights
Earnings from major tech players added momentum earlier in the week, with Microsoft and Meta Platforms delivering stronger-than-expected results. However, post-market reactions were mixed after Apple and Amazon released their earnings on Wednesday night:
- Apple’s Q1 results were solid, but the company surprised markets by reducing its share buyback program by $10 billion. CEO Tim Cook warned that tariffs could add $900 million in costs this quarter and signalled a supply chain shift to mitigate long-term trade exposure.
- Amazon Web Services (AWS) reported a 16.9% revenue increase to $29.27B, its slowest pace in five quarters. Forward guidance also disappointed, especially when compared to Microsoft Azure, which exceeded expectations.
Despite strong beats by many firms – with 76% of S&P 500 companies surpassing earnings estimates (FactSet) – Investor caution lingered due to muted guidance and growing macroeconomic uncertainty.
Commodities & Currency Moves
- Gold posted a weekly decline as trade tension relief reduced demand for safe-haven assets. Prices had touched record highs recently due to geopolitical uncertainty but eased as optimism returned.
- Silver rose 1.4% to $32.63/oz, and Platinum climbed 0.9% to $982.35/oz.
- The US Dollar Index dipped 0.2%, making gold more affordable for foreign buyers.
- Copper prices surged on trade optimism, with LME copper futures up 1.9% to $9,379.35/ton, and U.S. copper futures for July up 1.1% to $4.6843/lb.
Oil prices ended Friday on a modest upswing – Brent at $62.20 and WTI at $59.30 – but still posted weekly losses over 5%. Concerns persist that a prolonged trade war could dampen global demand, just as OPEC+ prepares to raise output.
Upcoming: Trump’s 2026 Budget Proposal
President Trump is set to release his 2026 budget proposal, which includes sweeping cuts to non-defence discretionary spending – totalling $160 billion. The targets? Environmental programs, renewable energy, education, and foreign aid.
In contrast, the proposal boosts funding for border security and defence, with fiscal oversight led by the newly formed Department of Government Efficiency (DOGE), headed by Elon Musk. DOGE aims to trim $150 billion in FY2026 and $1 trillion over the next decade.
Despite Republicans holding slim majorities in both chambers, the budget will likely face strong opposition in Congress, setting the stage for intense negotiations over spending priorities in the coming months.
Final Takeaway
From China trade developments to corporate caution and labour market softness, this week highlighted the fragile balancing act between optimism and risk. While Wall Street welcomed signs of potential progress, macroeconomic cracks are beginning to show.
Investors would be wise to remain nimble, focused on fundamentals, and ready for continued volatility as fiscal policy, trade dynamics, and economic data collide in the weeks ahead.
