By Stephen Culp
NEW YORK (Reuters) -U.S. stocks rebounded on Friday as investors hunted for bargains at the end of a tumultuous week in which U.S. President Donald Trump’s escalating trade war fueled recession fears and doused risk appetite.
A broad rally boosted all three major U.S. stock indexes to solid gains, with recently battered tech-related megacaps enjoying a comeback. Every one of the so-called Magnificent 7 artificial intelligence-related momentum stocks advanced, although six of them remain down on the year.
The S&P 500 and Nasdaq logged their biggest one-day percentage gains since November 6, the day after the U.S. presidential election.
Chips were outperformers, rising 3.3%, while the FANG group of tech-adjacent momentum stocks advanced 3.2%.
"I don’t see a catalyst that would spark this huge upside we’re seeing in markets," said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky.
"We’re obviously down 10% from all-time highs and pretty oversold, which sets good conditions for a rally even if the fundamental problems are not solved."
Even with Friday’s bounce, the S&P 500 and the Nasdaq notched their fourth straight weekly losses. The Dow also posted a Friday-to-Friday dip.
Encouraging inflation data on Wednesday and Thursday was overshadowed this week by mounting uncertainties arising from Trump’s frequently shifting policies, including tariff threats against the biggest U.S. trading partners.
Those uncertainties sent investors fleeing from equities in favor of safe-haven assets, lifting gold prices above the $3,000 per ounce level for the first time.
"The market doesn’t like the tariff stuff, the added uncertainty that keeps them from planning and making decisions," said Jed Ellerbroek, portfolio manager at Argent Capital, in St. Louis, Missouri.
"Trump is ... wreaking havoc, with his advisors talking about detox, about how maybe a recession is coming, maybe not. It’s unsettling, indecisive, it’s bad for the economy and bad for the stock market."
Those anxieties were laid bare by a dire report from the University of Michigan, which showed consumer sentiment plummeting to its most pessimistic level in nearly two years and one-year inflation expectations spiking to 4.9%.
The report echoes other recent downbeat survey data, including a Reuters/Ipsos poll of Americans conducted March 11-12 that showed 57% of survey participants believe Trump’s policies will do more harm than good.
The Dow Jones Industrial Average rose 674.62 points, or 1.65%, to 41,488.19. The S&P 500 advanced 117.42 points, or 2.13%, to 5,638.94 and the Nasdaq Composite gained 451.07 points, or 2.61%, at 17,754.09.
All 11 major sectors of the S&P 500 ended higher, with technology shares enjoying the largest percentage gain, rising 3.0%.
Tesla (NASDAQ:TSLA) rose 3.9% following a report on the electric vehicle maker’s plans to make a lower-cost version of its best-selling Model Y in Shanghai, aiming to regain ground lost during a price war in its second-largest market.
Nvidia (NASDAQ:NVDA)’s shares jumped 5.3% ahead of next week’s GPU Technology Conference (GTC), which is expected to culminate in a hotly anticipated keynote address from Nvidia CEO Jensen Huang.
Advancing issues outnumbered decliners by a 4.42-to-1 ratio on the NYSE. There were 75 new highs and 90 new lows on the NYSE.
On the Nasdaq, 3,281 stocks rose and 1,114 fell as advancing issues outnumbered decliners by a 2.95-to-1 ratio.
The S&P 500 posted one new 52-week high and five new lows while the Nasdaq Composite recorded 34 new highs and 161 new lows.
Volume on U.S. exchanges was 14.64 billion shares, compared with the 16.56 billion average for the full session over the last 20 trading days.