U.S. Stocks Rebound on Positive Trade Headlines

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Main Content:

1.    Major indexes weekly performance 

2.    U.S stocks weekly wrap 

3.    S&P 500 sector index weekly/month performance 

4.    China/Hong Kong stocks weekly wrap 

5.    Singapore stocks weekly wrap 

6.    Major indexes weekly chart and technical support & resistance levels

U.S.

For the week of Apr 25, U.S. stocks advanced, supported by several reports indicating that the ongoing trade tensions between the U.S. and China could be de-escalating. Speculation around near-term agreements with several other trading partners also appeared to be a tailwind, as were comments from Donald Trump that appeared to walk back his recent threat to fire Fed Chair Jerome Powell. The Nasdaq Composite(COMP) led returns for the major indexes in a sharp rebound from the prior week, while small- and mid-cap equities posted gains for the third consecutive week. Some better-than-expected corporate earnings releases during the week also seemed to be a driver of positive sentiment. Refer to below major indexes performance table for the week.

Key highlights for the week and next:

1.    U.S. equity and bond markets staged a relief rally in the week, as the U.S. administration softened further its stance on trade and as worries over the Fed's independence subsided. With the U.S. seemingly looking for a path to reduce tariffs, the peak in trade uncertainty and market volatility may be behind us. Having moved away from extreme pessimism, any further gains will likely require more tangible developments and agreements with major countries, rather than just signs of easing tensions. 

2.    Earnings under spotlight. In the two-week span between April 21 and May 2, 60% of the S&P 500 companies will have reported earnings, including six of the Magnificent 7 companies. The earnings season is off to a solid start, with 75% of companies reporting earnings above estimates, surprising positively by 10% compared with the last 10-year average of 7%1. Yet, these results do not reflect any tariff headwinds to sales growth and profitability, which is why the focus is on forward-looking guidance. 

3.    Business activity growth hits 16-month low. S&P Global reported its Flash Purchasing Managers’ Index (PMI) survey data for April, which indicated that U.S. business activity growth slowed to the lowest level in 16 months. While activity in the manufacturing space unexpectedly increased, from 50.2 in March to 50.7 in April, services activity growth slowed sharply, dragging the overall index down to 51.2 from 53.5 in the prior month 

4.    Consumer sentiment falls for fourth straight month. The University of Michigan reported that its final Index of Consumer Sentiment reading for April was 52.2, higher than a previous estimate but still 8% lower than March.

 

SPX sectors in play

10 out of the 11 SPX sectors recorded weekly gains, with the Tech(XLK) and Consumer Discretionary (XLY) sectors led the gains. The defensive sector Consumer Staples(XLP) lagged. Analysts reckon opportunities in Health Care(XLV) and Financials(XLF) going forward. Health care is a sector that is expected to lead earnings growth in the first quarter and offers both defensive and growth characteristics. Financials(XLF) is less exposed to trade headwinds and can also benefit from the administration pivoting to tax cuts and deregulation in the back half of the year. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

The SPX index broke above the major downtrend line drawn from the Fed 2025 peak, which is a bullish sign. It also closed above the Apr 9 giant 532-points day range 4948-5480 that we’ve been watching for the past two weeks, another bullish sign. Click below three indexes for their weekly charts.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

China stock markets advanced for the week amid expectations that the government will roll out more stimulus to cushion China’s economy from the impact of U.S. tariffs. The Shanghai Composite Index(SSE) added 0.56% while the blue chip CSI 300 rose 0.38%. In Hong Kong, the benchmark Hang Seng Index advanced 2.74%. (refer to the above weekly performance table).

Key highlights for the week and outlook for China/HK:

1.    On Friday, China’s Politburo—the ruling Communist Party’s 24-member executive policymaking body—said it would “fully prepare” emergency plans in response to external shocks. The group also said that China would set up new monetary tools and policy financing instruments to boost technology, consumption, and trade, Bloomberg reported, citing state media. Officials also pledged to go “all out to consolidate the fundamentals of economic development and social stability.” 

2.    The readout from the Politburo, which is led by Chinese President Xi Jinping, indicated that Beijing was taking a patient approach toward supporting the economy amid the U.S. trade war. Most analysts see the impact of U.S. levies on China becoming evident in the near term after the Trump administration hiked total tariffs on most Chinese goods to 145% earlier in April. But China’s better-than-expected growth in the first quarter and stimulus measures that the central government outlined in early March have afforded Beijing more time in unleashing economic aid.

Refer to below .HSI stocks top 40 performance of the week.

Click below SSE and .HSI indexes for their weekly charts. 

SSE weekly chart

.HSI weekly chart

Singapore

The Straits Times Index (STI) added 2.78% to close at 3823.78 this week, making its 2^nd consecutive weekly gains. Top weekly gainers including industrials such as HKland, JMH, Keppel and YZJ Ship and financials such as SGX and DBS.

HKland announced the sale of One Exchange Square in Hong Kong to the HKEX for HK$6.3 billion(S$1.1 billion). It also launched a US$200 million share buyback programme, aiming to return capital to shareholders and reduce share capital by cancelling repurchased shares. Refer to below table for STI index stocks weekly performance.

Click below for STI weekly chart.

STI weekly chart

Source: Some contents and data excerpted from various public market reports. Please comment to claim copyright ownership of any material, and I will remove it if necessary.