The stock market had a very good week with the S&P 500 gaining 4.6% and is now 10.9% above its low close in April 8 (4,982.77). The Nasdaq Composite jumped 6.7% this week and the Dow Jones Industrial Average registered a 2.5% gain. Things started relatively weak as stocks dropped on Monday in response to chatter that President Trump and his team are looking into whether the president can remove Fed Chair Jerome Powell, which fostered concerns about attacks on the Fed’s independence. Also, China warned of retaliation against countries that curtail their trade with China because of U.S. pressure in trade negotiations. The mood shifted later in the week when President Trump declared that he has no intention of firing Fed Chair Powell. He also indicated he won’t play hardball with China in any negotiations and that China’s tariff rate will come down substantially if a deal can be reached.
Outsized gains in the mega cap space contributed to the overall performance. The Vanguard Mega Cap Growth ETF (MGK) jumped 7.4%. The outperformance of the mega-caps was also reflected in S&P 500 sector performance. The technology sector bounced 7.9%, the consumer discretionary sector surged 7.4%, and the communication services sector rose 6.4%.
Helping the market were quarterly reports from a pair of mega-caps. Tesla (TSLA) saw an 18.1% increase after a dour Q1 earnings report that was tempered by Elon Musk indicating he will be curtailing his DOGE work. Alphabet (GOOG) shares jumped 6.8% after reporting better than expected results.