Trade Tensions Ease and Earnings Power U.S. Stock Rally Despite Global Oil Volatility

Wall Street Rebounds as Fed Outlook and Tech Surge Drive Optimism
U.S. equities have staged a powerful rebound as investors bet on upcoming Federal Reserve rate cuts and strong earnings from mega-cap tech stocks. The S&P 500 erased its 2025 losses, closing at 5,916.93, with standout performances from Nvidia, Tesla, and AMD. The rally is being fueled by investor confidence in the Fed’s potential policy easing amid easing inflation and positive corporate news.

One of the week’s most notable moves came from Foot Locker, which saw an 80% spike in share price following a $2.4 billion merger announcement with Dick’s Sporting Goods—though the latter’s stock dipped by 10% on the news. Meanwhile, Walmart beat earnings estimates, boosting investor sentiment further, even as UnitedHealth Group saw shares decline 5% due to a DOJ probe into alleged Medicare fraud.

The broader rally has been supported by signs that the Federal Reserve may be preparing to cut interest rates in the coming months, though policymakers remain cautious. This market optimism has been further underpinned by the easing of trade tensions and M&A activity suggesting corporate confidence in long-term growth.

China Tariff Truce and Rare Earth Dispute Reshape Global Risk Landscape
A temporary pause in U.S.-China trade friction has provided relief to global markets. Earlier this week, both nations agreed to a 90-day tariff rollback, sparking a rally in major export-sensitive stocks such as Apple, Nike, and Amazon. This move alleviates near-term pressure on supply chains and gives multinational corporations a window of opportunity to optimize logistics and inventory strategies.

However, trade cooperation remains fragile. Tensions flared again as China announced new restrictions on rare earth mineral exports—materials essential to the production of electric vehicles and consumer electronics. This development has raised alarms among U.S. automakers, who face rising input costs and potential production delays. For further context, The Verge outlines how rare earth controls could create new bottlenecks in EV production: read more here.

Adding to market unease is a sharp decline in oil prices—down more than $2 per barrel—as optimism grows over renewed U.S.-Iran nuclear talks. A deal could ease oil supply constraints by lifting sanctions on Iranian exports, but it also introduces new geopolitical risks. For a detailed breakdown of this story, see Times of India’s report here.

Economic Outlook Hinges on Trade and Tech Policies
Despite bullish momentum, recession fears haven’t entirely disappeared. JPMorgan CEO Jamie Dimon warned that persistent trade instability could still trigger an economic downturn. Meanwhile, shifting U.S. policies around AI exports have sent Nvidia’s valuation soaring by over $500 billion, highlighting the sensitive interplay between tech leadership and regulatory frameworks.

While markets are riding a short-term wave of optimism, longer-term stability will depend on whether central banks, global trade partners, and industry leaders can align on sustainable policy paths.