US Stock Futures Rise as Markets Try to End a Bumpy Week on a High Note – Despite Escalating US-China Trade War

It’s been a roller coaster and bumpy ride for Wall Street this week, but this morning, U.S. stock futures crept upward granting investors a breath of relief. No matter how dismal the continually bad news seems on the intensification of the U.S.-China trade war, the market is poised to close the week higher.

This week, the following happened, and here’s why this week’s modest comeback is significant.

The Week That Had Everything: Bounces, Slumps, and Surprise

If there was one word that would most accurately describe the past several days of the stock market, it would be pandemonium. We experienced a rollercoaster ride of cinema-quality highs and embarrassment-fest lows all in the span of but a mere week. It all looked so nice at the start especially with President Trump stopping some tariffs for 90 days. That pushed stock prices to record levels, and Wednesday was one to remember.

The S&P 500 jumped nearly 10%, one of the biggest single-day advances of the last half-century. The Dow Jones surged more than 2,900 points. The markets finally looked like they were getting some relief.

But then came Thursday and everything changed in a snap. Markets plummeted once again. The S&P 500 dropped over 3%, the Nasdaq plummeted even more, and the Dow dropped over 1,000 points in one day. One minute, there was jubilation on Wednesday and the next, there was pandemonium on Thursday.

So What Led to the Pandemonium? Hello (Again) to the US-China Trade War

The real issue came up when the U.S. imposed new tariffs – and not standard tariffs. President Trump took a decision to impose a general 10% duty on the majority of goods entering the U.S. But from China’s point of view, the U.S. was hard-nosed, imposing a gigantic 145% tariff on Chinese imports. As was not expected, China retaliated vigorously. Beijing announced on Friday that China will raise its tariffs on American goods from 84% all the way up to 125%. That is a substantial increase and a great signal that the two countries aren’t going to surrender.

China went so far as to make a forceful statement, denouncing the U.S. action and stating that these actions would be seen as an epochal blunder. The rhetoric was not just nasty it was provocative.

Investors Go Whiplash, Then Yearn for Quiet

No wonder, this roller-coaster scared the markets. Stock futures declined after China’s statement. But in a twist of fate, they did not stay down for long. Things improved by Friday morning. Dow futures rose by some 260 points (or about 0.6%), and S&P 500 and Nasdaq-100 futures rose 0.8%. It was a modest bounce, but with all the bad news, any splash of green was welcome to see.

So what was sufficient to change the mood? Perhaps it is a bright spot of hope on the continent. The European Union announced that its chief trade negotiator would go to Washington over the weekend and try to dial down tensions and even reach a more far-reaching agreement. That news did seem to calm investors – at least for the moment.

The Bigger Picture: Weekly Gains Still Intact

Despite the week-day drama, overall weekly performance of major indexes remains inexplicably bullish. Here’s where figures stood as of Friday:

• S&P 500: Up approximately 3.8% for the week its best week in November.
• Nasdaq: Up approximately 5.1%, demonstrating strength in technology stocks.
• Dow Jones: Moves towards its first positive weekly close in nearly six weeks. It will close this week up 3.3%.

Not bad at all, given how up and down things have been. Investors who rode out the rollercoaster of the week are seeing some payback heading into the weekend.

But Don’t Let the Green Numbers Fool You

While a solid week-end close is pleasant, no one’s sleeping sound yet. Markets are still in suspenders, and faith remains shaky. Since April 2 – when the White House first made public its “reciprocal tariff” plan – the S&P 500 actually fell more than 7%. That’s proof that investors still worry about the future.

The ping-pong with China is kindling fear of an even more protracted and expensive trade war. And there is more. Inflation, increased interest rates, and global tensions are all on people’s minds. One decent day or week isn’t going to erase those fears overnight.

Looking Ahead: What’s Next?

The next few article days will be history. We are all trapped in Washington, where the EU’s top trade negotiator is meeting with US officials. If there’s some positive movement, markets could respond positively. But if talks break down or new tariffs are threatened we could be back on the rollercoaster.

Meanwhile, investors will be eagerly waiting to hear about inflation, interest rate moves, and any early signs that the economy is decelerating. And every headline counts these days in such a volatile market.

A Spot of Relief, But Storm Clouds Remain

This week also put us in mind of just how quickly markets can rise as well as fall. Investors have been on the rollercoaster, with hope one day and fear the next. Friday’s futures bump is a teensy-weensy silver lining. The market can barely limpingly finish out the week in the plus column, and thank its stars. But the slings and arrows ain’t finished yet. Trade tensions with China, politics around the globe, and economic volatility all have still-long-to-cast shadows.

Investors take a deep breath meantime – with crossed fingers that next week is one of more knowledge, and fewer surprises.