Stocks Closed Higher Again Yesterday On Optimism For Tariff Deals To Come Stocks closed higher again yesterday, adding to Tuesday's sharp rally. Follow-through buying saw stocks gap higher on the open yesterday with the S&P up as much a 3.45% at his highest point, before spending the rest of the day trimming those gains. But a 1.67% gain after all was said and done was still a solid showing. The Nasdaq added 2.50% on the day. On Tuesday, positive comments on trade negotiations from Treasury Secretary Scott Bessent sent the market soaring. President Trump also said that tariffs on China will "come down substantially," if they are able to make a deal. Also on Tuesday, after the close, the President clarified that while he was unhappy with Fed Chair Jerome Powell not having cut interest rates yet (leading some to speculate that he would fire him), he was not looking to remove him. That also helped buoy the market going into Wednesday. On Wednesday, more positive comments on trade by Mr. Bessent helped extend the rally. He said there's an opportunity for a "big deal" with China to lower tariffs. Separately, there's talk that a more graduated tariff structure could be implemented, which Congress has favored. After the close yesterday, it was reported that the White House is considering exemptions for some automakers. That supposedly would include auto parts imported from China. All of this positive talk has helped stocks bounce well off their lows from the other week. More positive comments should also lift stocks. But soon we'll need to see some concrete deals in order for the market to attempt to regain their highs from earlier this year. In other news, yesterday's MBA Mortgage Applications showed the composite index fell -12.7% w/w with purchases off -6.6%, and refi's down -20.9%. New Home Sales, however, rose to 724K units (annualized) vs. last month's 674K and views for 682K. The Atlanta Fed Business Inflation Expectations came in at 2.8% y/y vs. last month's 2.5% pace. The PMI Composite Index slipped to 51.2 vs. last month's 53.5. The Manufacturing Index increased to 50.7 vs. last month's 50.2 and estimates for 49.4. And the Services Index decreased to 51.4 vs. last month's 54.4 and expectations for 52.5. And the Beige Book showed that while the economy continues to grow, there is "pervasive" uncertainty surrounding tariffs. The report said that "the outlook in several regions of the U.S. worsened considerably as economic uncertainty, particularly surrounding tariffs, rose." Today we'll get Weekly Jobless Claims, Durable Goods Orders, the Chicago Fed National Activity Index, Existing Home Sales, and the Kansas City Fed Manufacturing Index. We'll also get another 248 companies set to report today including Bristol Myers, Valero Energy and American Airlines before the open, along with Intel and Alphabet after the close. And we'll see if the markets can extend their 2-day winning streak into 3. See you tomorrow,  Kevin Matras
Executive Vice President, Zacks Investment Research | 
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