U.S. stocks are making a notable comeback after last week’s steep declines, which were driven by concerns that President Trump’s tariffs could be dragging down the economy. On Monday, major indexes surged, recapturing much of the ground they lost on Friday.
By early afternoon, the S&P 500 was up 1.3%, recovering over two-thirds of its Friday losses. The Dow Jones Industrial Average rose by 493 points (1.1%), while the tech-heavy Nasdaq Composite led gains with a 1.8% jump.
Idexx Laboratories was among the top performers, skyrocketing 26% after beating analysts’ profit expectations for the second quarter and raising its full-year forecast. Tyson Foods also posted stronger-than-anticipated earnings, pushing its shares up 3.2%. The company, known for brands like Jimmy Dean and Hillshire Farm, benefited from solid consumer demand.
These gains helped counter a 3.5% drop in shares of Berkshire Hathaway, after Warren Buffett’s conglomerate reported a year-over-year decline in second-quarter profits, partly due to a drop in the value of its investment in Kraft Heinz.
With stock prices hitting repeated record highs in recent months, expectations for strong corporate earnings have intensified. Since April’s market lows, a swift rally has sparked concerns about overvaluation.
Last week’s sell-off, the worst since May, stemmed less from valuation worries and more from signs the tariffs may be starting to dent economic performance. The latest jobs report showed a sharp slowdown in hiring and a rise in the unemployment rate to 4.2%, casting a shadow over growth prospects.
In response to the disappointing employment data, President Trump reportedly fired the official responsible for compiling the statistics. He also renewed criticism of the Federal Reserve, pushing for rate cuts to stimulate the economy. So far this year, the Fed has held interest rates steady, citing concerns about inflation—something tariffs could worsen by pushing prices higher for consumers.
The weak jobs data fueled speculation that the Fed could lower rates at its upcoming September meeting. That expectation pushed Treasury yields lower, with the 10-year yield dipping slightly to 4.20% and the 2-year holding steady at 3.69%.
According to David Lefkowitz, Head of U.S. Equities at UBS Global Wealth Management, a potential rate cut could help support financial markets. Coupled with mostly upbeat earnings reports, this could bring stability to stocks after a stretch of volatility. Before Friday’s sharp move, the S&P 500 had gone over a month without a single-day swing of 1% or more.
Looking ahead, market activity may be calmer this week, with attention turning to earnings updates from companies like Disney, McDonald’s, and Caterpillar, along with fresh data on business activity in the U.S.
Other notable stock movers included Wayfair, which surged 10.3% after exceeding analysts’ expectations on both profit and revenue, driven by stronger growth. Tesla climbed 2.1% after the company granted CEO Elon Musk a massive compensation package—96 million restricted shares worth around $29 billion. The decision comes just months after a court ruling forced Tesla to rescind a similar package, and it may ease investor fears about Musk’s future at the company.
CommScope saw its stock rocket nearly 90% after beating earnings forecasts and announcing a $10.5 billion cash deal to sell its connectivity and cable business to Amphenol, whose shares rose 3.1% on the news.
Meanwhile, On Semiconductor fell 12.9% despite meeting profit expectations, with the company noting early signs of demand stabilization across its automotive and industrial clients.
Boeing’s stock held steady after workers involved in fighter jet production began a strike, adding to the company’s recent operational challenges.
Globally, markets were mostly positive. France’s CAC 40 rose 1.1%, South Korea’s Kospi gained 0.9%, though Japan’s Nikkei 225 lagged with a 1.2% decline.
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