Stan Choe, AP Business Writer
NEW YORK (AP) — U.S. stocks are on the verge of record after President Donald Trump raised hopes for a cooldown in the World Trade War on Thursday.
The S&P 500 was 0.4% higher in noon trading. The Dow Jones industrial average rose 130 points (0.3%) as of 11:30am Eastern time, with Nasdaq Composite rising 0.7%.
Stocks were flip-floping in the morning, but changed modestly about trade after Trump said he had “a very good phone” with China’s leader Xi Jinping.
It shows the relaxation of tensions between the two biggest economies in the world. Both sides threatened to draw the economy into the recession as they each accused others of violating an agreement that suspended the hard tariffs they placed on the other.
Trump’s hoping to lower his tariffs after reaching trade deals with China and other countries is one of the main reasons why the S&P 500 has been so violently rebounded since it fell about 20% below the record two months ago. It is currently back to an all-time high of 2.4%.
Certainly, Trump has been guaranteed nothing amid the on and off tariff developments, and the market has become relatively calm with the latest China.
Trading activity in the options market suggests investors believe the next big move for the S&P 500 will arrive on Friday, which says the number of jobs created by more employers than the U.S. Labor Bureau destroyed in May. Wall Street’s expectations are against a slower employment rate starting in April.
The resilient job market is one of the lynch pins that underpinned the US economy, and all the uncertainty created by tariffs can mean businesses can freeze jobs.
Last week, more U.S. workers applied for unemployment benefits than economists expected, according to a report on Thursday. The numbers remain relatively low compared to history, but reached their highest levels in eight months.
The data said Procter & Gamble, the giant behind brands like Pampers Diapers and Cascade Dish Cleaners, will cut up to 7,000 jobs over the next two years. That inventory fell 1.3%.
On Wall Street, a $5 retailer has earned 6.9% since selling products sold between $1 and $5, reporting profits in the most recent quarter than analysts expected. CEO Winnie Park celebrates the broad range of strength across most of its products.
MongoDB increased 15.4% after the database company similarly delivered stronger profits than analysts expected.
The losers on Wall Street were Brown Forman, the company behind Jack Daniels and Woodford Reserve. That inventory fell 18.5%, potentially heading towards its worst day since trading began in 1972.
Brown Forman’s recent quarter profits and revenues have not met Wall Street’s expectations. The company said it expects the fiscal year to be challenging due to “consumer uncertainty and the potential impact of currently unknown tariffs.”
The CEO of PVH, which runs the brand Calvin Klein and Tommy Hilfiger, similarly cited challenges from “an increasingly uncertain consumer and macroeconomic background.”
The stock fell 18.4% despite reporting higher revenue and profits for the recent quarter than analysts expected. The company says it is likely to cut its profit forecast for the entire fiscal year and offset only some of the potential hits it faces due to tariffs.
With expectations built up in financial markets, the Federal Reserve will need to cut interest rates later this year to support an economy that is potentially weakened by tariffs. Yields fell sharply on Wednesday after a pair of more than expected reports about the US economy shored traders’ bets for cuts.
The Fed is holding interest rates this year after cutting them until the end of 2024. Part of the reason for the suspension is that the Fed wants to see how much Trump’s tariffs will hurt the economy and raise inflation. Lower interest rates can boost the economy, but they tend to give more fuel to inflation.
Treasury yields remained stable on Thursday ahead of Friday’s employment report. The 2010 Treasury yield rose to 4.38% from 4.37% on Wednesday after falling from 4.46% the previous day. It was low before Trump’s encouragement explanation about his call with Xi.
In overseas stock markets, European indicators were mixed together after the European Central Bank again cut its key interest rates.
With the movements in Asia, South Korea’s Kospi rose 1.5% after the country’s new president and liberal politician Lee Jae-myeon began his term.
AP business writers Eurikeyama and Matt Ott contributed.
Original issue: June 5th, 2025 9:58am EDT
