Global Stocks Reach Four-Week High as US Rebounds: Markets Wrap

The U.S. stock market staged a dramatic turnaround in April, pushing the S&P 500 to a four-week high and ending a volatile streak driven by tariff fears and inflation. But behind the rebound lies a precarious balancing act between corporate resilience and geopolitical risks. Let’s break down what’s moving markets—and where to look for opportunities.

The Market’s Dramatic U-Turn

The S&P 500 clawed back from its lowest close of the year on April 8 (4,982.77), a 18.9% drop from its February peak. By April’s end, it had rallied six straight sessions, fueled by strong earnings from tech giants like Microsoft and Meta. The Dow Jones Industrial Average rose 0.3% on April 29, its longest winning streak of 2025, while the Nasdaq Composite teetered near flat as investors digested mixed tech earnings.

What’s Driving the Rally?

1. Earnings Power Through Chaos
2. Microsoft (MSFT) and Meta (META) crushed Q1 estimates, with Microsoft’s cloud bookings and Meta’s ad revenue defying AI-driven disruptions.
3. Caterpillar (CAT) surged 4% premarket after beating expectations, proving industrial resilience.

4. But not all shone: Starbucks (SBUX) plummeted 8% on weak guidance, and Super Micro Computer (SMCI) fell 17% after missing forecasts.

5. Tariff Talks and Trade Tensions

6. Investors clung to hopes of a U.S.-China tariff truce after a cryptic social media hint. General Motors (GM) delayed its earnings call amid uncertainty, highlighting the auto sector’s vulnerability.

7. show their struggle, down 15% and 22%, respectively, year-to-date.

8. Economic Data: A Mixed Bag

9. The first-quarter GDP contracted 0.3%, the first decline in three years, blamed on tariff-driven import spikes.
10. Inflation worsened: The Core PCE Index hit 3.5%, up from 2.6%, raising Fed policy concerns.

The Defensive Play: Low Volatility’s Triumph

While the S&P 500 fell 12.5% from its peak, the S&P 500 Low Volatility Index (SPLV) dropped just 3.7%, thanks to its focus on steady sectors like Utilities and Consumer Staples. This index, which tracks the 100 least-volatile stocks, now holds a 9.9% YTD lead over the broader market.

“Defensive doesn’t mean boring—it means surviving the storm,” says analyst Sam Stovall. shows its outperformance clearly.

The Bear Case: Why This Rally Could Fade

• Tariff Time Bomb: If negotiations fail, inflation could hit 5%, triggering a recession.
• Earnings Reality Check: Tech’s post-earnings slump—Nvidia (NVDA) and Broadcom (AVGO) fell premarket—hints at tougher Q2 results.
• Fed’s Dilemma: With rates still high, even a moderate slowdown could pressure the Fed to cut rates sooner than expected.

Jim’s Take: Play Defense, But Look for Offense

1. Buy the Dip in Tech Giants: Microsoft and Meta’s strong fundamentals justify dips.
2. Double Down on Low Volatility: Utilities like NextEra Energy (NEE) and consumer staples like Coca-Cola (KO) offer steady income.
3. Avoid Tariff-Tainted Sectors: Autos and industrials remain risky until trade clarity emerges.

Final Word: A Fragile Rally, but a Rally Nonetheless

The market’s rebound is real—but so are the risks. The S&P 500’s 12.5% drop from its peak was the fastest correction in decades, and history shows such “manufactured corrections” (driven by policy, not fundamentals) often reverse quickly.

If you’re an investor, this is no time to be complacent. The April 8 low is a critical test—if it holds, we could see a sustained recovery. But with May’s GDP and inflation data looming, keep one hand on your wallet and the other on the steering wheel.

Final Stat: The S&P 500 Low Volatility Index has outperformed during 83% of corrections since 1990. This time isn’t different.

Stay alert, stay aggressive where it counts—and keep your eyes on the horizon.