“Sometimes life is like this dark tunnel. You can't always see the light at the end of the tunnel, but if you just keep moving... you will come to a better place.” — Uncle Iroh

Investors’ hopes for a turnaround in stock misfortunes were emboldened after a midweek bonanza rally in major indexes trended higher to finish the week. 

On Wednesday, after a 90-day pause on tariffs for most countries was announced, stocks ripped higher. The S&P 500 jumped 9.5%, posting its largest gain since 2008, while the Nasdaq Composite shot up 12% in its second-best day ever. The pause signaled the return of the Trump put, said Fundstrat Head of Research Tom Lee, meaning that President Donald Trump won’t tolerate too much pain in the financial markets. 

“The White House does care what the stock market is doing,” Lee said. 

The enthusiasm didn’t last into Thursday, but stocks sharply rebounded on Friday. The broad-based index added 5.7% this week, and the Nasdaq Composite gained 7.3%. The White House said Friday that slightly over a dozen countries are working on trade deals, which may have contributed to the recovery Friday. 

However, the markets aren’t out of the woods yet. Investors are still pricing in the 10% universal baseline tariff in place, and China is dealing with 145% tariffs, with no path in sight for negotiations. To make matters worse, China reciprocated Friday with tit-for-tat tariffs on the U.S.

“There are still a lot of questions that need to be answered—how are tariffs going to work out after a 90-day pause? How are businesses going to actually adjust their plans?” said Head of Data Science “Tireless” Ken Xuan during the weekly huddle.

But he remains positive, saying that a “win is a win, and a pause is better than no pause.” 

Lee is in the same camp. Despite the “two steps forward, one step back” move, stocks can still find their footing, as they have in the past, he said. Our Chart of the Week has more details: 

“Outside of China, it is far less onerous,” he added. “Overall, the trade picture, as much as you might think things have gotten worse, it’s actually getting a little better.”

Stocks have come under selling pressure this year, as investors became nervous about whether the economy could maintain its pace of growth and whether corporate profits and consumer spending would be adversely impacted. In 2025, the S&P 500 has declined 8.8% and the Nasdaq Composite has fallen 13%. 

In some good news this week, the inflation report on Thursday came in cooler than expected. From a year ago, inflation rose 2.4%, below the 2.6% expected by economists. It fell from a month ago for the first time since May 2020 to below 0.1% in March. Economists had expected a rise of 0.1%. 

Xuan liked that the decrease was led by key components, such as airfare, hotels and some auto-related constituents. 

This reaffirms that the “the rise in the prior two months has most likely been due to the statistical data distortions because of seasonal adjustments,” he said. 

Xuan warned that inflation may tick higher in the coming months. That would be mainly due to tariffs because when consumers become worried about paying higher prices in the future, they are more likely to pull forward their purchases, which could lead to transitory inflationary pressures. As a result, markets are likely going to be choppy for now, Xuan said.

Head of Technical Strategy Mark Newton agrees. “I don’t sense that this can continue to build upon itself and just take markets right back to new highs right away,” Newton said. 

One reason why is because momentum, which was largely positive over the past few years, has turned negative. That’s why the market needs to do some work before “we can simply say, ‘OK, it’s going to be a V-shaped recovery, and we’re going to go straight back to highs.’”

Newton likes tech stocks, especially the Magnificent Seven, as valuations have come down sharply and tech remains the biggest profit center for the U.S. this year. Lee is of the same belief. 

Elsewhere

Coal is hot these days. The Trump administration has loosened environmental regulations tied to coal, including allowing older plants to keep generating electricity to meet the rising artificial intelligence-led power demand and directed federal agencies to repeal any regulations that serve as barriers to coal mining. He also signed a proclamation that waives air-pollution restrictions on coal plants. The move aims to mark a big comeback for the most polluting fossil fuel. A New York Times piece reported that coal accounts for roughly 40 percent of the world’s industrial carbon dioxide emissions, the main driver of global warming. 

Big banks’ verdict on the economy? Not looking good, according to earnings released Friday. BlackRock Chief Executive Larry Fink said that anxiety about markets is dominating conversations with clients. JPMorgan Chase shared this view, with Chief Executive Jamie Dimon saying that “the economy is facing considerable turbulence.” Wells Fargo executives, too, said that they are seeing volatility and economic uncertainty. Profits during the first three months of the year rose at JPMorgan and Wells Fargo but fell at BlackRock. 

Tariffs don’t scare Walmart, at least that’s what the retailer’s executives said Wednesday during its investor day. Chief Executive Doug McMillon said, “while in the short term, we’re not immune, we’re positioned to play offense.” Investors are worried that retailers like Walmart are particularly vulnerable to tariffs as their main customer base is lower-and middle-class consumers, who can’t potentially swallow higher prices for everyday goods. 

In addition to tariffs being paused this week, there was also other good news out of Washington. Republicans advanced their budget in the House this week, advancing the president’s agenda of cutting taxes and raising the debt ceiling. The president was also able to convince holdout conservatives by telling them they could come up with spending cuts later. 

And finally: House Stark has something to celebrate. Dire wolves are back from extinction. The species popularized by the hit HBO show Game of Thrones was able to come back thanks to a combination of ancient DNA, cloning, and gene-editing technology that altered the DNA of a gray wolf. Though the two different species look similar, there is much debate in the scientific community if it truly is a dire wolf or a gray wolf with dire wolf-like characteristics.