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Another Dead Cat Bounce? S&P 500 Green Despite Massive Trade War Escalation

Another Dead Cat Bounce? S&P 500 Green Despite Massive Trade War Escalation

Published: by Omor IE

Key Points

  • Stocks today have been surprisingly resilient despite trade war escalations.

  • Both China and the EU retaliated with their own tariffs today.

  • The stock market is flat as of writing, with mega-cap stocks and chip stocks leading the way.

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China slapped an 84% tariff on U.S. goods overnight after a U.S. counter-retaliation that put 104% tariffs on Chinese goods. S&P 500 futures plunged momentarily but bounced back up as the market opened and have been trading green since. Mega-cap stocks are still positive, and many AI/chip stocks are solidly green despite the huge escalation.

The market has become impossible to predict due to massive swings in either direction. The VIX volatility index is the highest since the COVID-19 recession, and there are no notable positives to outweigh the tariff-related risks the economy is facing. As such, this could be a dead cat bounce, and the S&P 500 could end up closing red.

Here’s a market update as of 11:30 A.M (ET) today.

  • The S&P 500 is up 15.13 points, or 0.3%.
  • The Nasdaq Composite is up 166.9 points, or 1.09%.
  • Dow Jones Industrial Average is up 63.52 points, or 0.17%.
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Stocks Bewilder Wall Street

Perhaps it’s just retail buying the dip, but recent stock trends have confused many big-name investors on Wall Street. For example, Jim Cramer was very confused to see Apple (NASDAQ: AAPL) soar despite the trade war between China and the U.S. escalating. AAPL stock is up 4.2% as of writing.

It’s not the only stock that’s rising unexpectedly. NVIDIA (NASDAQ: NVDA) is up 3.4% despite earlier restrictions from China on rare earths. The Wall Street Journal also ran a piece last week saying that chip stocks won’t escape tariffs despite exemptions from the U.S. Trump also warned that tariffs on chips are “starting very soon.” However, NVDA, AMD (NASDAQ: AMD), and Intel (NASDAQ: INTC) are still significantly higher today. It’s unlikely the gains will hold if tariffs are not negotiated down soon.

Notable Winners Today

  • Nutex Health (NASDAQ: NUTX) is up 13.5% as Benchmark raises its price target to $150.
  • WeRide (NASDAQ: WRD) is up 11%. It is a Chinese autonomous driving company, and the recent gain is a recovery from earlier selloffs.
  • Iamgold (NYSE: IAG) is up 10.6% due to soaring gold prices.
  • Simply Good Foods (NASDAQ: SMPL) is up 10% after reporting strong results. It reported $0.46 in EPS and 15% revenue growth to $359.7 million. Both came in above analyst estimates of $0.39 in EPS and $354.2 million in revenue.
  • Harmony Gold Mining Company (NYSE: HMY) is up 10%. Again, due to soaring gold prices.

CrowdStrike (NASDAQ: CRWD), Newmont (NYSE: NEM), and Delta Air Lines (NYSE: DAL) have also gained significantly.

Notable Losers Today

Trump has vowed tariffs on pharmaceuticals, and this is dragging down many biotech and pharma-related stocks.

  • Pacira Biosciences (NASDAQ: PCRX) is down 13% as it erases earlier gains of a patent settlement.
  • Rhythm Pharmaceuticals (NASDAQ: RYTM) is down 12%. It is also erasing earlier gains from a BofA upgrade on a trial win.
  • TG Therapeutics (NASDAQ: TGTX) is down 10%.

The image featured at the top of this post is ©samxmeg / E+ via Getty Images.

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