Wall Street Today: Nasdaq rallies 3% on Mag 7; S&P 500 set for best day since elections, on track for 4th weekly loss

Wall Street Today: US stocks rebounded on Friday, March 15, after investors shopped for bargains at the end of a tumultuous week, despite the S&P 500 index entering the correction territory, shedding $4 trillion in the previous session. US President Donald Trump's escalating trade war and tariffs fueled recession fears in the US and doused the risk appetite on Wall Street. 

The sharp rally sent all major US indices higher. The tech-heavy Nasdaq has rallied three per cent so far, driven by recently battered tech-related mega caps flying a comeback. All seven of the Magnificent 7 artificial intelligence (AI)- related momentum stocks were in positive territory, although six remained down on the year.

Chips were outperformers, rising 2.8 per cent, while the FANG group of tech-adjacent momentum stocks advanced 2.7 per cent. Still, the S&P 500 and the Nasdaq remain on track for their fourth straight weekly losses, and the Dow is on course for its third consecutive weekly dip. Tariff-related growth uncertainties sent investors fleeing from equities to safe-haven assets, lifting spot gold prices past the $3,000 per ounce level for the first time ever.

Also Read: Global markets today: S&P 500, Nasdaq crash up to 2%; is a bigger correction coming in the US stock market?

Wall Street Today: S&P 500 set for best day since elections, fourth weekly loss

The Dow Jones Industrial Average rose 584.51 points, or 1.43 per cent, to 41,398.08, the S&P 500 gained 101.17 points, or 1.83 per cent, at 5,622.69 and the Nasdaq Composite climbed 393.91 points, or 2.28 per cent, to 17,696.92.

The roughly two per cent gain in the S&P 500 was set to be the biggest since the aftermath of the presidential election. Data showing a slide in US consumer confidence did not prevent the market rebound. This follows a selloff culminating in a 10 per cent plunge of the US equity benchmark from its peak. 

The broad selloff occurred after Trump threatened to impose a 200 per cent tariff on European wine and spirit imports, the latest trade war escalation after the European Union retaliated against US tariffs on steel and aluminium. This was just a week after the Nasdaq confirmed a correction, with uncertainties in play.

Also Read: US stock market crash: Wall Street ends lower as trade war escalates; S&P 500 slips into correction territory

The S&P 500 is on track to record its longest weekly losing streak in seven months. The blue-chip Dow Jones Industrial Average is nine per cent below its recent record high and set to record its worst week in two years. All 11 major sectors of the S&P 500 were higher, with energy and technology shares taking the largest percentage gains so far in the session. 

Tech and AI stocks have been under the most pressure in the recent sell-off after critics said their prices shot too high in the frenzy around AI. Apple shares climbed 1.2 per cent to pare its loss for the week, which had earlier been on pace to be its worst since the 2020 COVID crash.

Tesla rose 3.7 per cent 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 in its second-largest market. Nvidia's shares gained 4.4 per cent ahead of the GPU Technology Conference (GTC), which is expected to culminate in an anticipated keynote address from Nvidia CEO Jensen Huang.

Also Read: The Wall Street Slump: How can Indian investors protect their US stocks portfolio?

US bond markets, US dollar

In US Treasuries, yields rose as the stock market recovery reduced safe-haven demand for US government debt. In the bond market, Treasury yields rose to recover some of their sharp recent losses. The yield on the 10-year Treasury climbed to 4.30 per cent from 4.27 per cent late Thursday and from 4.16 per cent at the start of last week. The 30-year bond yield rose 2.1 basis points to 4.617 per cent.

Yields have been swinging since January when they were approaching 4.80 per cent. When worries worsen about the US economy’s strength, yields have fallen. When those worries lessen, or when concerns about inflation rise, yields have climbed.

The US dollar gained 0.42 per cent against the Japanese yen to 148.43 and against the Swiss franc, the greenback strengthened 0.37 per cent to 0.885 on hopes the US government would avoid a shutdown over the weekend.

Also Read: Can favourable US inflation data trigger a trend reversal in US stock market?

Gold prices, global indices today

In stock markets abroad, indexes rose across much of Europe and Asia. Stocks jumped 2.1 per cent in Hong Kong and 1.8 per cent in Shanghai after China’s National Financial Regulatory Administration issued a notice ordering financial institutions to help develop consumer finance, encourage the use of credit cards, and be transparent in their lending practices.

MSCI's broadest gauge of global stocks rose 13.19 points, or 1.61 per cent, to 834.78 on Friday but was still eyeing its biggest weekly fall since December. Earlier in Asia, MSCI's broadest index of Asia-Pacific shares outside Japan closed up almost one per cent but lost almost 1.5 per cent for the week.

On Friday, spot gold breached $3,000 an ounce for the first time in early London trading before losing ground. The precious metal is up more than 13 per cent year-to-date, as trade wars and growth worries boosted its safe-haven appeal. Spot gold fell 0.19 per cent to $2,981.99 an ounce. US gold futures rose 0.07 per cent to $2,986.50 an ounce.

In terms of currencies, the euro gained broadly due to reports about Germany. Against the US dollar, the euro was up 0.18 per cent at $1.0871, while against the pound, it gained 0.47 per cent to 84.17 pence and rose 0.56 per cent to 0.96265 against the Swiss franc.

Crude oil prices regained some ground on Friday after falling sharply in the previous session. Investors weighed diminishing prospects of a quick end to the Ukraine war that could bring back more Russian energy supplies to Western markets. US crude rose 0.59 per cent to $66.94 a barrel and Brent rose to $70.25 per barrel, up 0.53 per cent on the day.

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Wall Street indices in correction: What should be your trading strategy?

According to Nigel Green, CEO of deVere Group, US equity markets are flashing warning signs. The Nasdaq and S&P 500 are now in correction territory, reinforcing fears that the downturn is accelerating. Yet, even in crisis phases, an opportunity emerges. “There are always winners and losers,” says Nigel Green.

“Defensive sectors, such as healthcare and consumer staples, are positioned to weather the storm better than most. Safe-haven assets, including gold and high-quality bonds, will likely see renewed investor interest. Investors with liquidity will have opportunities to buy quality assets at discounted prices as fear grips markets," he added.

“Investors can’t afford complacency. Now is the time to reassess portfolios, hedge against volatility, and take advantage of shifting market dynamics. Holding excess cash may not be optimal. Inflation still lingers, eroding purchasing power. Instead, strategic reallocation towards quality equities, defensive assets, and global diversification will be key to thriving in the turbulence ahead.”

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts, consider individual risk tolerance, and conduct thorough research before making investment decisions, as market conditions can change rapidly, and individual circumstances may vary.