The Dow bounces back 675 points a day after the S&P 500 fell into a correction
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Stocks rebounded Friday following days of declines that pushed the S&P 500 into correction territory after Senate Democrats opted not to block a stopgap government funding bill, easing one uncertainty. Additionally, President Donald Trump didn’t escalate his trade war today.
The S&P 500 closed up 2.1%, with the Nasdaq Composite climbing 2.6% and the Dow Jones Industrial Average advancing 674 points, or 1.65%. The Magnificent 7 tech stocks all gained. A much-worse-than-expected consumer confidence reading from the University of Michigan but only a brief dent in delayed gains.
The markets, which have been slammed by President Donald Trump’s tariff plans, got a boost after progress was made by Congress to avoid a government shutdown. Senate Majority Leader Chuck Schumer, a New York Democrat, said he would vote to keep the government open, carving a path for members of his party to join Republicans and pass a six-month spending bill ahead of a looming Friday deadline.
“You have to make these decisions based on what is best for not only your party but your country,” Schumer told reporters.
The S&P 500 index had fallen more than 10% from its recent peak, officially entering correction territory on Thursday. It was the fastest shift to a correction since the six trading days at the start of the Covid pandemic in March 2020, according to Barron’s. Both the Nasdaq and the Dow have fallen about 4% over the past few days.
“We aren’t too surprised about the volatility of this magnitude,” said Mike Reynolds, Glenmede’s VP for investment strategy. “It’s not just the tariffs themselves that have been proposed, it’s that uncertainty that there could be additional levies just around the corner.”
The Trump administration may deal another blow next month when it imposes “reciprocal” tariffs, as these are likely to fall on countries including Vietnam, India, and Indonesia that are alternatives to China as sources of low-cost goods, Reynolds told Quartz.
Nvidia (NVDA+4.51%) gained 5.3% on Thursday after Taiwan-based Hon Hai Precision Industry (HNHPF+6.19%) said it’s seen no slowdown in demand for the servers it assembles for Nvidia and expects AI-related demand to double this quarter, Bloomberg reported. Hon Hai’s ADRs climbed 5.6%.
Ulta (ULTA+13.32%) stock gained 14% after the cosmetics retailer reported better-than-expected fourth-quarter results — and despite its projection for the current period falling short of analysts’ projections. Docusign (DOCU+14.11%) jumped 15% after fiscal fourth-quarter earnings per share beat expectations.
CK Hutchison’s (CKHUY-5.48%) ADRs fell 5.4% after China used state-controlled media to signal displeasure with the conglomerate’s planned sale of its ports in Panama to a BlackRock-led (BLK+2.77%) group, the WSJ reported. Li Auto’s (LI-4.49%) ADRs fell 4.4% after the Chinese EV maker said its revenue will probably fall this quarter.
