Bromance Cools, Market Sizzles and Surges Higher
US stocks rallied on Friday, with the S&P 500 (^GSPC) breaching the 6,000 level following a moderate beat on the monthly jobs report and rising investor hopes of a cooldown in the acrimonious feud between President Trump and Elon Musk.
The S&P 500 added about 1.0% to close at the 6,000 mark, its highest level since February. The Dow Jones Industrial Average rose over 400 points, or 1.1%, while the tech-heavy Nasdaq Composite gained 1.2%.
Tesla (TSLA) shares rebounded as CEO Musk and Trump moved to cool tensions. Musk backed off his threat to decommission the Dragon spacecraft used by NASA after Trump threatened his government contracts. However, the White House tamped down reports of a potential "peace call" between the two.
Tesla shares partially recovered from a 14% wipeout in a broader stock slide on Thursday as mounting differences between the two powerful men erupted into the open. Musk called for the president's impeachment, while Trump threatened the contracts and breaks critical to Musk's business empire.
The feud injected more unpredictability into an already uncertain market, just as weary investors had become cautiously optimistic that Trump tariffs could be reined in and the US economy might prove resilient.
On Friday President Trump said high level trade talks with China would take place in London this upcoming Monday.
Meanwhile on Friday morning, the labor market showed more signs of resilience as Trump's tariffs continued to seep in to the economy. The US added 139,000 jobs in May, more than the 126,000 expected by economists as the hiring rate slowed and unemployment held flat at 4.2%.
Following the May jobs beat, President Trump again criticized the Federal Reserve for being "too late" with its monetary policy. Trump urged the central bank to ease borrowing costs by reducing rates, writing in a social media post: "Go for a full point, Rocket Fuel!"
Sean Conlon and Jesse Pound of CNBC aslo report Dow rises more than 400 points on solid jobs report, S&P 500 touches 6,000:
Stocks jumped Friday after the latest nonfarm payrolls data came in better than expected, easing concern the economy faces an imminent slowdown.
The Dow Jones Industrial Average popped 443.13 points, or 1.05%, to close at 42,762.87. The blue-chip index was up more than 600 points at its highs of the session. The S&P 500 also gained 1.03% — surpassing the 6,000 level for the first time since late February — and settling at 6,000.36. The Nasdaq Composite rallied 1.20%, ending at 19,529.95.
The market’s move higher was supported by a more than 3% gain in Tesla. Shares of the electric vehicle maker weighed on the market Thursday, tumbling 14%, as CEO Elon Musk sparred with President Donald Trump on social media. Other major tech-related names such as Nvidia, Meta Platforms and Apple also ended the session higher.
U.S. payrolls climbed 139,000 in May, the Bureau of Labor Statistics reported Friday, above the Dow Jones forecast of 125,000 for the month but less than the downwardly revised 147,000 in April. The unemployment rate was unchanged at 4.2%.
“The nonfarm payrolls report came in better than expected,” Anthony Saglimbene, chief market strategist at Ameriprise, said in an interview with CNBC. “It’s showing that the labor market is holding up very well in spite of kind of some slowing growth trends.”
A series of data released earlier this week signaled a possible economic slowdown, raising questions about the impact of the multi-front tariff negotiations and the next steps for the Federal Reserve, which next meets to set interest rate policy on June 17-18.
On Thursday, unemployment claims for last week’s period came in higher than expected. That came a day after ADP reported that private sector payrolls saw a gain of just 37,000 in May, which substantially missed the Dow Jones estimate for 110,000. Activity in the U.S. services sector also weakened unexpectedly last month.
“There’s still some uncertainty about what the inflation impacts are going to be from the tariffs,” Saglimbene continued, adding that he expects tariff impacts to start showing up more in the economic data during the summer. “Markets are kind of holding judgment about what all this means for growth and profitability over the next couple quarters, so we’re kind of back to where we were in February.”
Trump has since offered some hope on trade, announcing later Friday that talks between the U.S. and China will take place next week in London.
The S&P 500 ended the session more than 2% below its February high. The broad market index, along with the other two major benchmarks, also posted notable gains for the week. The S&P 500 was up 1.5% on the week, and the Dow posted a 1.2% advance. The Nasdaq jumped 2.2% over the period.
What a bizarre week culminating with the Thursday feud between President Trump and Elon Musk.
It was vicious, it was awkward but today both men decided to cool it.
One thing is for sure, this market couldn't care less if the bromance is breaking up or cooling down, stocks are ripping higher.
I was just looking at the list of stocks making a new 52-week high today and among the many, you'll find Microsoft, Ebay, Mastercard, GE Aerospace, Jabil Circuit, Kratos Defense, Paychex, Sunlife Financial, Toronto Dominion Bank, Visa, Zscaler and many more.
Moreover, shares of big data analytics software provider Palantir Technologies (PLTR) popped 6.5% higher, securing the top daily performance in the S&P 500. Positivity around its expanding government business helped lift Palantir to an all-time high on Tuesday, but before Friday's gains, the stock had been pulling back for a couple of sessions. Palantir and other artificial intelligence companies benefited from upbeat sentiment after earnings results from chipmaker Broadcom (AVGO) revealed strong AI demand.
And not that we need more evidence that animal spirits are alive on Wall Street, Circle's stock (CRCL) soared again on Friday after it exploded higher in its first day of trading, rising as much as 200% in Thursday's session after the stablecoin issuer's long-anticipated public market debut.
More evidence of animal spirits? Sure, here you go. Two months after CoreWeave’s IPO fizzled, the AI company has surged 250% and left doubters baffled.
Blame CTAs, blame elite hedge funds, blame retail, blame FOMO, blame whoever you want, this market doesn't want to stop forging ahead and the Trump tariff tantrum is long, long gone.
If this nonsense continues, 2025 might end up even better than 2023 and 2024 for the S&P 500.
What's that? It can't continue higher? Inflation is coming back, recession lies ahead?
Maybe but with the Atlanta Fed tracker posting a 3.8% annualized growth rate, the US economy remains extremely strong and recession sure doesn't seem like it's around the corner (even if it's half that, no recession ahead unless something blows up in financial markets).
All this to say, the debt problems are real but the market doesn't seem to care until something breaks.
And once again this year, the pain trade remains a melt-up, not a meltdown.
Alright, let me wrap it up with this week's best performing and worst performing US large cap stocks:
And if your really want to see animal spirits in action, check out top performing stocks across all US exchanges this week:
Below, Douglas Holtz-Eakin, American Action Forum president and former CBO director, Kitty Richards, Groundwork Collaborative senior fellow and former Treasury Department official in the Biden administration, Saira Malik, Nuveen CIO and head of equities and fixed income, and CNBC's Rick Santelli, Steve Liesman and Mike Santoli join 'Squawk Box' to break down the May jobs report.
Next, David Kelly, JPMorgan Asset Management chief global strategist, joins 'Squawk on the Street' to discuss the latest employment data, if the Federal Reserve should cut rates and much more.
Third, Jan Hatzius, Goldman Sachs chief economist, joins 'Squawk on the Street' to discuss the economist's thoughts on the latest jobs report, the Federal Reserve and more.
Fourth, Jeremy Siegel, Wharton professor emeritus and WisdomTree chief economist, joins 'Closing Bell' to discuss the latest jobs report, the budget bill and trade deal with China.
Fifth, Peter Boockvar, Bleakley Financial Group chief investment officer, joins 'Fast Money' to explain why he is skeptical of this market bounce.
Sixth, Ray Dalio says an understanding of what he calls "the big debt cycle" is critical in order for policymakers, investors and the general public to realize where we are, and where we are headed, with debt. In his new book Dalio provides solutions and details how America might avoid a fiscal crisis.
Seventh, Citadel Founder and CEO Ken Griffin speaks on stage at the 2025 Forbes Iconoclast Summit to discuss the effects of President Donald Trump's tariffs on the economy, the risk of US debt in triggering an economy slowdown, and Trump's 'Big Beautiful Bill'.
Lastly, Bill Ackman, the founder of Pershing Square Capital Management, talks on stage at the 2025 Forbes Iconoclast Summit to delves into his career, investment strategies, and recent activism.
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