Tech Stocks Power Wall Street Comeback as Tariff Cuts Fuel Optimism

Wall Street Rallies Behind Tech Surge and Cooling Inflation

Wall Street staged a strong recovery this week, with the S&P 500 erasing its 2025 year-to-date losses amid renewed investor optimism. Driving the momentum were leading tech names such as Nvidia and Palantir, which soared on the back of positive earnings and market sentiment. Coinbase also gained significant ground after being announced as the first cryptocurrency company to join the S&P 500, replacing Discover Financial Services.

Markets reacted favorably to April’s softer-than-expected inflation data. The Consumer Price Index (CPI) rose just 0.2%, marking the smallest annual increase in four years. This has reignited hopes for a less aggressive stance from the Federal Reserve, encouraging buying activity across sectors.

While the Nasdaq and S&P 500 posted solid gains, the Dow Jones lagged slightly due to a steep decline in UnitedHealth Group shares. Nonetheless, the overall outlook remained bullish, with Goldman Sachs raising its S&P 500 year-end target to 6,100. The firm also lifted its earnings projections through 2026, citing easing macroeconomic risks and improving corporate performance.

Meanwhile, health tech startup Hinge Health is preparing to list on the NYSE, targeting a valuation of up to $2.6 billion. The IPO signals renewed appetite for public listings in the digital health and biotech spaces. Reuters has more on the Hinge Health IPO.

Tariff Cuts Spark Relief Rally Across Global Markets

Beyond U.S. borders, significant geopolitical developments have added fuel to the rally. The Biden administration announced a reduction in tariffs on key Chinese imports, trimming rates to 54%. This move, part of broader efforts to stabilize trade relations, was welcomed by global investors as a sign of easing tensions between the two economic giants.

India also entered the spotlight with a proposal to establish a “zero-for-zero” tariff agreement on auto parts with the U.S., aiming to double bilateral trade to $500 billion by 2030. This initiative could create new export opportunities and deepen economic ties between the two countries.

However, not all trade news was positive. The European Union has signaled potential retaliatory tariffs on nearly €100 billion worth of American goods, in response to ongoing disputes over digital services taxes and agricultural standards. This adds a layer of complexity to an otherwise optimistic international trade landscape. The MarketWatch report on revised S&P 500 targets explores how these developments are reshaping investor sentiment.

As inflation moderates and trade dynamics evolve, market watchers are eyeing upcoming earnings reports and central bank guidance for signs of sustained momentum. For now, May 2025 is shaping up to be a turning point for equities after a volatile start to the year.