ASX bounces higher after Wall Street rally
The S&P 500 jumped 2.1 per cent a day after closing more than 10 per cent below its record for its first “correction” since 2023. The last time the index shot up that much was the day after President Donald Trump’s election, when Wall Street was focusing on the upsides of Trump’s return to the White House.
A multi-day “relief rally could be coming” after so much negativity built among investors, said Yung-Yu Ma, chief investment officer at BMO Wealth Management. Swings in sentiment don’t go full-tilt in just one direction forever, and the US stock market has been tumbling quickly since setting a record less than a month ago.
One piece of uncertainty hanging over Wall Street may be clearing after the Senate made moves to prevent a possible partial shutdown of the US government.
Past shutdowns have not been a huge deal for financial markets. But any reduction of uncertainty can be helpful when so much of it has been sending the US stock market on big, scary swings not just day to day but also hour to hour.
To be sure, the heaviest uncertainty remains with Trump’s escalating trade war.
While stock prices may be close to finishing their reset to account for tariffs set to hit in April, Ma said concerns about how big an impact cutbacks in federal spending will have on the economy are “likely to remain for some time.”
US households and businesses have already reported drops in confidence because of all the uncertainties created by Trump’s barrage of on -again, off -again tariff announcements and other policies. That’s raised fears about a pullback in spending that could sap energy from the economy.
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Worries look to be only worsening among US households, according to a preliminary survey released Friday by the University of Michigan. Its measure of consumer sentiment sank for a third straight month, mostly because of concerns about the future rather than complaints about the present. The job market and overall economy look relatively solid at the moment.
Gains for Big Tech stocks and companies in the artificial-intelligence industry also helped support the market. Such stocks have been under the most pressure in the recent sell-off after critics said their prices shot too high in the frenzy around AI.
Nvidia rose 5.3 per cent to trim its loss for 2025 so far below 10 per cent. Apple climbed 1.8 per cent to pare its loss for the week, which at one point had been on pace to be its worst since the 2020 COVID crash.
With AP
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