S&P 500 rallies on easing US-China trade tensions and tech sector leadership

The S&P 500 closed last Friday’s session with a strong gain of nearly 1.85%, marking its second consecutive week of recovery, driven by significantly improved market sentiment following positive signals from U.S.–China trade relations and strong performance from Big Tech stocks.

Market focus remained on the latest developments in the ongoing trade tensions between the world’s two largest economies.

After several weeks of escalating rhetoric and tariff threats, both the U.S. and China recently indicated their willingness to resume working-level negotiations.

The U.S. expressed an interest in reopening dialogue to avoid further escalation, while Beijing signaled it was ready to engage in “constructive” discussions.

These conciliatory tones helped ease investor concerns and provided a tailwind for risk assets like equities.

However, core issues in the dispute remain unresolved, and the prolonged standoff has already taken a toll on corporate earnings. A clear example is Apple’s recent earnings report: although the company beat profit expectations, it recorded a significant decline in sales in China — reflecting the real impact of geopolitical uncertainty and trade barriers on business operations.

This highlights that while short-term market optimism may persist, structural challenges will remain unless both countries find a viable diplomatic solution. Equity markets, including the S&P 500, could face renewed pressure at any time.

Among the leading stocks, Nvidia and Tesla were key drivers of the S&P 500’s rally in the latest session, gaining 2.59% and 2.38%, respectively. The return of risk appetite — especially in the tech sector — has allowed many technology stocks to rebound following a prolonged correction earlier this year. Investors are also looking ahead to the upcoming Q1 earnings season, particularly from major tech firms, which hold considerable influence over the S&P 500’s direction.

This week, the market will remain focused on upcoming macroeconomic developments and key U.S. data releases, including the April Services PMI and ISM Non-Manufacturing PMI. These economic indicators may influence the S&P 500 in the short term and help shape expectations for the Federal Reserve’s monetary policy path, which is likely to be addressed in the upcoming FOMC meeting on Thursday.