U.S. stocks swung higher Thursday afternoon as investors digested earnings from major consumer and pharma names while trying to make sense of mixed signals on the next phase of the trade war.
The Dow Jones Industrial Average rose 399 points, or 1%, while the S&P 500 added 1.7% and the tech-heavy Nasdaq was up 2.2%. It was a quick rebound for the Dow, which had opened down more than 200 points, dragged lower by steep losses in Procter & Gamble and Merck, both of which were trading down after earnings. Shares in Google parent Alphabet were up about 1.7% in afternoon trading. Google reports earnings after the bell.
The back-and-forth start followed Beijing’s pointed denial of any ongoing trade negotiations with the U.S., undercutting a key narrative that had fueled Wednesday’s rally. With earnings season in full swing and macro tensions unresolved, markets are facing a familiar blend of noise, spin, and real economic pressure.
Beijing said there have been no trade talks — contrary to the hints and claims swirling stateside.
“There are currently no economic and trade negotiations between China and the United States,” He Yadong, a spokesperson for China’s Ministry of Commerce, said in comments reported by The New York Times. “Any claims about progress in China-U.S. economic and trade negotiations are baseless rumors without factual evidence.”
Days of social media skepticism now look prescient, as prominent accounts on X raised early doubts about selective leaks and carefully vague statements seemingly aimed at propping up markets. China’s firm denial gave those suspicions new weight.
As the old Wall Street saying goes, “Buy the rumor, sell the news.”
The mixed open for stocks followed the market’s rise on Wednesday, after comments from President Donald Trump and Treasury Secretary Scott Bessent that suggested potential easing of U.S.-China trade tensions. The Dow rose 1.1% on Wednesday, the S&P 500 gained 1.7%, and the Nasdaq advanced 2.5%.
Bessent said the current 145% U.S. tariffs on Chinese goods and 125% Chinese tariffs on U.S. goods are unsustainable. He indicated that both sides recognize the need for tariff reductions before meaningful negotiations can proceed.
Speaking to reporters following his remarks, Bessent, a champion of the administration’s tariffs, said Trump is not considering unilaterally lowering the levies imposed on China ahead of any negotiations with Xi Jinping, China’s leader. However, he added, “I don’t think either side believes that the current tariff levels are sustainable.”
“This is the equivalent of an embargo and a break between the two countries on trade does not suit anyone’s interest,” Bessent said.
The Fed’s Beige Book released Wednesday added texture to the growing sense of caution in the U.S. economy. While overall activity was flat, businesses flagged rising costs, softening demand, and a spike in tariff-related uncertainty — mentioned over 100 times across the 12 Fed districts. Consumer spending wobbled and wage growth slowed, even as inflation pressures stayed sticky.
The vibe, to borrow the report’s own language, is one of mounting hesitation.
Options traders are bracing for more turbulence. According to Citigroup (C) strategists, markets are pricing in daily moves of 1% or more in the S&P 500 through at least May 23, with even sharper swings expected around key economic events. A 1.8% move is anticipated for the April jobs report, and a 1.7% swing is priced in for Fed Chair Jerome Powell’s next post-meeting news conference — a sign that volatility may be here to stay.
Also on Wednesday, Trump said he believes a millionaire tax would be “disruptive.” Still, when policy whiplash erodes stock market value, it’s the wealthiest who absorb most of the immediate losses — just without any of the redistribution.
A slate of corporate results arrive Thursday, with earnings already in from Procter & Gamble (PG), Merck (MRK), PepsiCo (PEP), Union Pacific (UNP), and Comcast (CMCSA). After the bell, Google (GOOGL) parent Alphabet will headline tech earnings, with investors zeroed in on cloud growth, AI monetization, and antitrust fallout.
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