Good morning. U.S. equity markets surged to start the month, with the S&P 500 notching its eighth consecutive daily gain and retracing more than 75% of the February-April decline. Technology and AI-linked names continued to lead the way after strong earnings from Microsoft and Meta, while hopes of easing trade tensions added fuel to the fire. Apple and Amazon are set to report earnings this evening, with markets eager to see if the tech momentum can continue.

Thursday’s rally was supported by upbeat sentiment indicators, improving trade headlines, and a solid start to May. Investors also digested mixed economic data, including a dip in jobless claims and a resilient reading on U.S. manufacturing. With the April jobs report due this morning and several other key data points in focus, the week could end with fireworks.

Don’t Blame Imports for GDP Weakness
The Economist argues that while imports surged in Q1, they weren’t the primary culprit behind the dip in U.S. GDP growth. Much of the drag came from slower inventory investment and declining government spending. The piece urges policymakers to avoid using trade flows as a scapegoat.
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Trump Budget Proposal Calls for $163B in Cuts
WSJ reports that President Trump’s new budget blueprint proposes slashing spending across numerous federal programs. The administration argues the cuts will reduce deficits and restore fiscal discipline, but critics warn it could hurt lower-income Americans and slow growth. Congressional negotiations are expected to be contentious.
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China Signals Willingness to Talk Tariffs
China’s commerce ministry said it is open to renewed trade talks with the U.S., Bloomberg reports. The shift comes as Beijing faces mounting pressure from factory slowdowns and a weak export outlook. While both sides are signaling flexibility, formal negotiations have yet to begin.
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April Jobs Report Will Test Tariff Impact
MarketWatch previews the April payrolls data, seen as the first real test of how recent trade tensions have affected hiring. Consensus estimates call for a slowdown in job growth, with some sectors potentially hit harder than others. A soft report could reignite Fed rate cut expectations.
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U.S. May Leverage Saudi Influence to Pressure Russia
The U.S. may try to coordinate with Saudi Arabia to manage oil supplies and apply pressure on Russia, MarketWatch writes. The strategy could backfire if global energy prices spike or if Russia counters by boosting its own exports. Talks remain preliminary but highlight the complex geopolitical web around oil.
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Chinese Factories Shuffle Production Amid Tariffs
CNBC reports that many Chinese manufacturers are temporarily halting and then restarting output to cope with changing U.S. tariff schedules. The tactic allows them to minimize duties and adjust logistics. The practice signals deeper distortions in global supply chains.
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Buffett Valuation Metric Flashes Buy Signal
Bloomberg highlights Warren Buffett’s favored valuation ratio—market cap to GDP—which is flashing a bullish signal. While it’s still elevated by historical standards, the recent market correction and GDP growth moderation have narrowed the gap. Some see this as a reason to add equity exposure cautiously.
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Stocks extended their rebound on Thursday as the Nasdaq jumped 2% and the S&P 500 posted its eighth straight daily gain. The rally was led by technology and communication stocks following strong results from Microsoft and Meta. Defensive sectors such as healthcare and consumer staples lagged. Bond yields rose, with the 10-year Treasury climbing to 4.21%, and the dollar rebounded, particularly against the yen. Oil prices bounced after a steep April decline, supported by corporate earnings and new Iran-related sanctions. Sentiment indicators turned more optimistic, though investor surveys still show a large contingent of bearishness.

Markets have entered May with surprising strength, powered by tech earnings and softer trade rhetoric. Today’s jobs report could either confirm this momentum or test it. Either way, the recent shift in tone from policymakers and the resilience of earnings suggest investors still see reasons for optimism—at least for now.