U.S. equities continued to rebound higher last week with support from solid corporate earnings reports, resilient labor market data, and rising optimism for a gradual de-escalation in trade tensions, though hard details on trade deals remain sparse and new tariff announcements are keeping a lid on investor enthusiasm.

U.S. equities managed to rally back sharply last week and recoup some of the year-to-date losses as the White House signaled potential to de-escalate in the trade war against China, and President Trump walked back his comments about the potential to fire Fed Chairman Jerome Powell.

U.S. stock markets concluded the holiday-shortened week with notable declines, as escalating trade tensions and economic uncertainties weighed heavily on investor sentiment. The S&P 500 and Nasdaq Composite each fell by approximately 1.5%, while the Dow Jones Industrial Average dropped 2.7%.

By several measures, the last two weeks have marked one of the most eventful stretches in market history including one of the largest historical one-day stock rallies on Wednesday in response to the Trump Administration’s 90-day pause on reciprocal tariffs after a brutal sell-off in the prior week.

U.S. equities suffered their worst two day drop since March 2020 late last week in the wake of Wednesday’s tariff announcements and a quick response from China to fire back with its own matching retaliatory tariff of 34% on U.S. goods.