Another Solid Jobs Report Amid Tariff Turmoil, Stocks Eye 9th Day Of Gains

The U.S. labor market proved resilient in April 2025, with another solid jobs report underscoring economic strength even as tariff-related trade disputes roil global markets. Meanwhile, U.S. stocks are on track for their ninth consecutive daily gain—the longest such streak in nearly two decades—driven by strong tech earnings and fading fears of a prolonged trade war.

Jobs Report: Steady Growth Amid Shifting Winds

The Bureau of Labor Statistics reported 177,000 new nonfarm jobs in April, aligning with expectations and marking the 12th consecutive month of job growth above 150,000. Unemployment held steady at 4.2%, with wage growth ticking up to 3.8% annually. Key sectors like healthcare (+51,000 jobs) and transportation (+29,000) led gains, while federal employment declined by 9,000—a sign of fiscal tightening.

The report’s stability contrasts with broader economic headwinds. A 0.3% GDP contraction in Q1 2025, driven by tariff-fueled import spikes, highlights the tension between labor market health and trade policy uncertainty.

Tariff Turmoil: A Double-Edged Sword

President Trump’s April 2nd declaration of a national emergency led to 10% tariffs on all imports, escalating into higher levies for major trade partners like China. While the administration claims these tariffs will “bring jobs home”, the World Trade Organization warns of a 0.2% global trade decline in 2025, with North America hardest hit.

The impact on China has been stark: its manufacturing PMI sank to 49.0 in April, signaling contraction, while 9 million jobs in key industries face direct exposure to U.S. tariffs. Yet, the U.S. market is rallying, with investors betting on trade deal optimism and exemptions for critical goods like semiconductors and pharmaceuticals.

Stocks: Tech Leads, but Risks Lurk

The S&P 500’s 9-day winning streak—its longest since 2004—has been powered by tech giants. Microsoft surged 7.6% after reporting $3.46 EPS, while Meta’s 23% EPS beat sent shares up 9%. Even Amazon, which warned of tariff costs, clawed back losses after initial post-earnings dips.

However, not all sectors are thriving. Apple’s shares fell 4% after projecting $900 million in tariff-related costs, and Chevron dropped 2% as oil prices hit a four-year low ($58/barrel). The energy sector’s slump underscores how global trade tensions and supply chain shifts are unevenly felt.

The Risks Ahead

1. Inflation Lingering: The core PCE price index rose to 3.5% in Q1, complicating the Federal Reserve’s path.
2. Trade Uncertainty: China’s Commerce Ministry remains skeptical of U.S. tariff removal demands, with no formal talks confirmed.
3. Earnings Overhang: While 76% of S&P 500 companies beat Q1 earnings estimates, recession risks loom if GDP contraction persists.

Conclusion: A Fragile Rally, But Momentum Holds

Despite tariff-driven volatility and a contracting economy, U.S. stocks are thriving on earnings resilience and hopes of diplomatic trade breakthroughs. The S&P 500’s 9-day streak—bolstered by tech’s AI-driven renaissance and a labor market at full tilt—reflects investor optimism that policy adjustments will outweigh short-term pain.

However, the risks remain clear:
- Global trade volumes could shrink further if tariffs escalate, per the WTO’s 1.5% downside warning.
- China’s manufacturing contraction (PMI 49.0) threatens global supply chains and U.S. exports.
- Corporate profit warnings from Apple and Amazon underscore tariff costs.

For now, markets are betting on a “soft landing”—where tariff exemptions and trade deals offset GDP headwinds. Investors should monitor Friday’s May jobs report and Federal Reserve commentary closely. The path ahead is narrow, but for now, the bulls are in control.