US stocks jump and the bond market swings to cap Wall Street’s chaotic
and historic week
[April 12, 2025] By
STAN CHOE
NEW YORK (AP) — U.S. stocks jumped Friday in another manic day on Wall
Street, while the falling value of the U.S. dollar and other swings in
financial markets suggested fear is still high about escalations in
President Donald Trump’s trade war with China.
The S&P 500 rallied 1.8%, after veering repeatedly between gains and
losses, to cap a chaotic and historic week full of monstrous swings. The
Dow Jones Industrial Average went from an early loss of nearly 340
points to a gain of 810 before settling at a rise of 619 points, or
1.6%, while the Nasdaq composite jumped 2.1%.
Stocks kicked higher as pressure eased a bit from within the U.S. bond
market. It’s typically the more boring corner of Wall Street, but it’s
been flashing serious enough signals of worry this week that it’s
demanded investors' and Trump’s attention.
The yield on the 10-year Treasury topped 4.58% in the morning, up from
4.01% a week ago. That’s a major move for a market that typically
measures things in hundredths of a percentage point. Such jumps can
drive up rates for mortgages and other loans going to U.S. households
and businesses, which would slow the economy, and they can indicate
stress in the financial system.
But Treasury yields eased back as the afternoon progressed, and the
10-year yield regressed to 4.48%. That’s still higher than the day
before, but not by as eye-wateringly much.
Susan Collins, president of the Federal Reserve Bank of Boston, told the
Financial Times that the Fed “would absolutely be prepared” if markets
become disorderly and “does have tools to address concerns about market
functioning or liquidity should they arise.”
Several reasons could be behind this week’s jump in U.S. Treasury
yields, which is unusual because yields typically fall when fear is
high.
Investors outside the United States could be selling their U.S. bonds
because of the trade war, and hedge funds could be selling whatever’s
available in order to raise cash to cover other losses. More worryingly,
doubts may be rising about the United States’ reputation as the world’s
safest place to keep cash because of Trump’s frenetic, on-and-off tariff
actions.
The value of the U.S. dollar also fell again Friday against everything
from the euro to the Japanese yen to the Canadian dollar.
Gold, however, lived up to its reputation as a safer haven for investors
and saw its price rise to another record.
The shaky trading came after China announced Friday that it was boosting
its tariffs on U.S. products to 125% in the latest tit-for-tat increase
following Trump’s escalations on imports from China.
The repeated U.S. tariff increases “on China has become a numbers game,
which has no practical economic significance, and will become a joke in
the history of the world economy,” a Finance Ministry spokesman said in
a statement announcing the new tariffs. “However, if the US insists on
continuing to substantially infringe on China’s interests, China will
resolutely counter and fight to the end.”
Rising tensions between the world’s two largest economies could cause
widespread damage and a possible global recession, even after Trump
recently announced a 90-day pause on some of his tariffs for other
countries, except for China.
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Specialist Thomas McArdle, right, works at his post on the floor of
the New York Stock Exchange, Friday, April 11, 2025. (AP
Photo/Richard Drew)
 All the uncertainty caused by the
trade war is eroding confidence among U.S. shoppers, which could
affect their spending and translate into damage for the economy,
which came into this year running at a solid rate.
A preliminary survey by the University of Michigan suggested
sentiment among U.S. consumers is falling even more sharply than
economists expected. “This decline was, like the last month’s,
pervasive and unanimous across age, income, education, geographic
region, and political affiliation,” according to the survey’s
director, Joanne Hsu.
“We remain in the early innings of this global trade regime change,
and while the 90-day pause on reciprocal tariffs temporarily
reversed the market selloff, it does prolong uncertainty,” according
to Darrell Cronk, president of Wells Fargo Investment Institute.
That’s why many on Wall Street are prepared for more swings to hit
markets. This past week began with huge swings for U.S. stocks
within each day as rumors swirled and then got batted down about a
possible 90-day pause on Trump’s tariffs. Then the U.S. stock market
surged to one of its best days in history after Trump did deliver a
pause, before swinging to end the week.
All told, the S&P 500 rose 95.31 points Friday to 5,363.36. The Dow
Jones Industrial Average climbed 619.05 to 40,212.71, and the Nasdaq
composite climbed 337.14 to 16,724.46.
Friday’s swings came after a set of stronger-than-expected profit
reports from some of the biggest U.S. banks, which traditionally
help kick off each earnings reporting season.
JPMorgan Chase, Morgan Stanley and Wells Fargo all reported stronger
profit for the first three months of the year than analysts
expected. JPMorgan Chase rose 4%, Morgan Stanley added 1.4% and
Wells Fargo lost 1%.
Another report on inflation also came in better than expected. That
could give the Federal Reserve more leeway to cut interest rates if
it feels the need to support the economy.
But Friday’s report on inflation at the wholesale level was backward
looking, measuring March’s price levels. The worry is that inflation
will rise in coming months as Trump’s tariffs make their way through
the economy. And that could tie the Fed’s hands.
The University of Michigan’s survey suggested U.S. consumers are
bracing for inflation of 6.7% in the year ahead. That’s the highest
forecast since 1981, and such expectations can create a feedback
loop that pushes inflation higher.
In stock markets abroad, indexes were scattershot around the world.
Germany’s DAX lost 0.9%, but the FTSE 100 in London added 0.6% as
the government reported the economy, the world’s sixth largest,
enjoyed a growth spurt in February. Japan’s Nikkei 225 dropped 3%,
while Hong Kong’s Hang Seng climbed 1.1%.
___
AP writers Jiang Junzhe and Elaine Kurtenbach contributed.
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