The S&P 500 has erased its 2025 losses thanks to a surprising drop in inflation to 2.3% and a tariff truce between the US and China, leading to a strong stock market rebound.
Lower-than-expected inflation, a strong signal for the markets
The S&P 500 has recovered a 15% drop accumulated since the beginning of the year in just one month. Fueled by a surprising easing of inflation and an unexpected tariff truce between Washington and Beijing, the American stock market is back on track.
Trump triggers (temporarily) the tariff brake
Donald Trump took a sudden turn on April 9, announcing a 90-day suspension on most of his new tariffs. The index then surged by 9.5% in a single session. The announcement, dubbed ‘liberation day’ by the White House, came after a month of tensions where markets were hammered by threats of reciprocal tariffs, plunging the S&P down to -15% in 2025.
New momentum on Monday: +3.3% for US stocks after China and the US jointly confirmed a mutual reduction in tariffs during talks in Switzerland.
Tech companies take the lead again, investors recalibrate
Tech stocks, battered in April, regain control. Nvidia soars by 6%, Palantir too, Super Micro Computer climbs by 13%. The Nasdaq jumps by 1.5%. In contrast, healthcare and real estate disappoint: UnitedHealth drops by 16% after the surprise departure of its CEO.
Facing geopolitical shifts, investors revise their forecasts upwards. Goldman Sachs raises its profit growth expectations and year-end S&P target, citing ‘a more favorable tariff environment and a reduced recession risk.’
A fragile rebound against a backdrop of persistent tensions
Despite this euphoria, caution is advised. US tariffs on China remain at 30%, and those on other countries around 10%, well above pre-Trump levels.
The tariff easing, however welcome, is not enough to reverse the global slowdown trend that has been in motion for several quarters.
