Wall Street benchmark indices extended their upward momentum for the second straight session on Thursday, as market participants continued to respond positively to the withdrawal of tariff threats on European allies. The rally, characterized by what traders are calling the TACO (Trump Always Chickens Out) trade, saw bond yields decline and risk assets recover significantly from earlier weekly losses.
Market Performance Overview
The Dow Jones Industrial Average led the recovery with gains exceeding 300 points on Thursday, completely erasing the substantial 900-point decline experienced on Tuesday. This remarkable turnaround demonstrates the market's resilience and responsiveness to policy developments.
| Index Performance: |
Thursday Action |
Weekly Recovery Status |
| Dow Jones: |
+300+ points |
Full recovery from Tuesday's 900-point loss |
| S&P 500: |
Higher |
Near complete recovery from Tuesday |
| Nasdaq: |
Higher |
Close to recovering Tuesday losses |
Smallcap stocks continued their impressive run, outperforming the S&P 500 for the 14th consecutive session, highlighting sustained investor appetite for smaller companies.
Currency and Commodities Impact
The US Dollar index experienced notable weakness, falling below the 99 mark once again. This dollar decline provided significant support to haven assets, driving precious metals to impressive levels.
| Asset Performance: |
Price Level |
| Gold (Spot): |
Tested $4,950 per ounce |
| Silver (Spot): |
Reached $96 per ounce |
| US Dollar Index: |
Below 99 |
Crude oil prices moved lower following Trump's remarks regarding the Russia-Ukraine conflict and comments on Iran, reflecting the market's sensitivity to geopolitical developments.
Corporate Earnings Highlight
Intel shares declined 12% in extended trading despite delivering an earnings beat. The semiconductor giant's guidance for the current quarter disappointed Wall Street analysts, with supply chain issues and the stock's strong pre-earnings run-up contributing to the negative reaction.
Economic Data Releases
Thursday's economic data provided a mixed but generally positive picture of the US economy:
| Economic Indicator: |
Actual |
Estimate |
Context |
| Q3 GDP (Annualized): |
4.4% |
4.3% |
Fastest growth in two years |
| Initial Jobless Claims: |
200,000 |
210,000 |
Better than expected |
| PCE (Month-on-Month): |
0.2% |
0.2% |
In-line with projections |
| PCE (Year-on-Year): |
2.8% |
2.8% |
Met economist expectations |
| US Savings Rate: |
3.5% |
- |
Lowest since October 2022 |
The GDP growth of 4.4% represents the fastest pace in two years, exceeding economist expectations and reinforcing the economy's robust performance.
Market Outlook and Key Events
Investor attention is now focused on two critical upcoming announcements. Trump has indicated that interviews for the next Federal Reserve Chair position have been completed, with an announcement expected soon. Additionally, market participants are closely monitoring the Bank of Japan's policy decision and commentary from the BoJ governor, particularly given recent concerns surrounding Japanese bond markets and their potential global implications.
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