Wall Street staged a dramatic rebound on Friday, closing out one of the most volatile weeks in recent history with a burst of optimism—despite global trade tensions that remain anything but resolved.
The Dow Jones Industrial Average rose 619 points, or 1.56%, to finish at 40,212.71. The S&P 500 gained 1.81%, closing at 5,363.36, while the tech-heavy Nasdaq climbed 2.06% to 16,724.46.
All three major indexes ended the week in the green. The S&P 500 rose 5.7%—its best week since November 2023. The Nasdaq gained 7.3%, and the Dow added nearly 5%.
Friday’s rally came after the White House said President Donald Trump is “optimistic” that China will ultimately seek a deal to ease trade tensions. That statement, however vague, was enough to push sentiment into the green following a punishing 24 hours for equity markets.
From whiplash to rebound
This week’s swings were nothing short of historic. On Wednesday, stocks soared after Trump announced a 90-day pause on some of the “reciprocal” tariffs affecting U.S. allies. The S&P 500 surged 9.52%—its third-biggest one-day gain since World War II—while the Dow rocketed nearly 2,963 points. But the rally evaporated on Thursday, when trade war jitters returned with force. The Dow fell more than 1,000 points, the S&P 500 slid 3.46%, and the Nasdaq dropped 4.31% as traders pulled back from risk.
The CBOE Volatility Index (VIX), Wall Street’s so-called fear gauge, spiked above 50 earlier in the week before settling around 37 on Friday, a sign that turbulence is far from over.
Even with the Friday rally, major indexes remain lower than they were at the start of the month. Since the announcement of Trump’s broad new tariff regime on April 2, the S&P 500 is still down more than 5%.
A tariff war with teeth
At the centre of the volatility lies a rapidly evolving trade war. The Trump administration has imposed a three-tiered tariff structure: a flat 10% levy on most global imports, 25% on goods from Canada and Mexico not covered by the USMCA, and a punishing 145% tariff on Chinese imports. The latter is the result of this week’s executive order stacking a new 125% duty on top of earlier fentanyl-related tariffs.
China responded Friday by raising its own tariffs on U.S. goods from 84% to 125%. In a pointed statement, Beijing’s Ministry of Finance dismissed further U.S. escalation as “a joke in the history of world economy,” and warned that U.S. products were now effectively unmarketable in China.
