U.S. stocks rallied after a Federal Reserve official signaled that the central bank is ready to help stabilize the market if needed.
The S&P 500 Index rose about 1.4%. The Nasdaq 100 gained 1.5%. The Dow Jones Industrial Average and Russell 2000 Index increased 1.3%% and 1.1%, respectively.
The Federal Reserve “would absolutely be prepared” to help stabilize financial markets if conditions become disorderly, Boston Fed President Susan Collins said in an interview with the Financial Times. She added that “markets are continuing to function well” and “we’re not seeing liquidity concerns overall.”
Stocks erased earlier losses which were driven by rising bond yields. Traders have been selling off Treasuries amid erratic trade actions from the White House instead of buying them to shelter from volatility.
Those moves have prompted questions about their long-held haven status. Rising yields raise borrowing costs, posing a challenge to economic growth.
“The bond market is in control of the market now,” said Walter Todd, chief investment officer of Greenwood Capital Associates. Investors are concerned about the “inability of yields to do down, which negatively impacts the stock market sentiment.”
He added that capital flowing out of U.S. stocks, bonds and the dollar is “something we rarely see, providing additional uncertainty to an already stressful market environment.”
U.S. first-quarter earnings season kicked off on Friday, with big banks reporting mixed results.
JPMorgan Chase & Co. shares rose 4.08% after the bank posted record revenue for the first quarter, blowing past the average analyst estimate. Chief Executive Officer Jamie Dimon warned that the economy is facing “considerable turbulence” and said a lot of companies will remove guidance.
On the economic front, U.S. consumer sentiment fell to an almost three-year low, according to survey data from the University of Michigan. Meanwhile, year-ahead inflation expectations jumped to the highest levels since 1981.
Investors are also focused on the potential for escalation of the conflict between the U.S. and China after Beijing retaliated against Donald Trump’s latest tariffs by hiking duties on all US goods from 84% to 125% starting April 12.
It’s been a wild week for U.S. stocks. After flirting with a bear market on Monday and Tuesday, the S&P 500 is now on pace for the biggest weekly gain since November 2023.
The moves comes after President Donald Trump on Wednesday announced a pause on some of his harshest tariffs on Wednesday afternoon, propelling the S&P 500 to its biggest one-day gain since 2008.
Bloomberg Intelligence’s market pulse index indicated that stocks hit the panic zone this week, hinting that the beginnings of a bottoming process may be emerging. But, unlike previous signals, valuations and lack of policy support remain an impediment to stocks.
To Bank of America Corp.’s Michael Hartnett, investors should sell any rallies in the S&P 500 until the Federal Reserve steps in and the U.S. and China de-escalate the global trade war.
The market was extremely volatile this week. The VIX Index — known as Wall Street’s fear gauge — reached 55 in early trading Wednesday and then plunged by the most on record. The volatility of options on the Vix index itself jumped to its highest level ever.
“The extreme intraday moves highlight two-way risks, given the market hypersensitivity to any positive news as well as the fear of the downside,” wrote Tanvir Sandhu, chief global derivatives strategist at Bloomberg Intelligence.
Investors are dealing with a wide range of emotions, from fear and anger to flat out disbelief, Amy Wu Silverman, head of derivatives strategy at RBC Capital Markets said.
“Although some are readying their ‘shopping lists’ no one seems ready to jump in yet,” she said. “Particularly as earnings season gets underway and the expectation is for a number of companies to simply not give guidance. I fully expect that we’ve simply reflated to a new, higher volatility regime.”
Among single stock movers, shares of chipmakers with US manufacturing plants fell Friday after China announced new tariffs, targeting semiconductor imports.
Gold mining stocks climbed Friday as the flight to havens pushed bullion prices above $3,200 an ounce. Shares of companies working on biotech AI models soar as FDA pivots away from animal testing.
Next week, investors will be watching earnings from Goldman Sachs Group Inc., Citigroup Inc., Bank of America Corp., Johnson & Johnson and Netflix Inc. among others.
For the first quarter, analysts now see the S&P 500’s year-over-year earnings growth of 6.7% for the S&P 500, down from about 11.1% in early November when Trump was elected, according to data compiled by Bloomberg Intelligence.
For all of 2025, BI sees profits rising 9.4%, compared with a projection of 12.5% at the beginning of the year.
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