Equities Recover from Last Week’s Soft Jobs Report

Last week brought renewed investor optimism.  Equity markets fully recovered from the prior week’s slump because of a weak jobs report.  The S&P 500 returned 2.4% for the week and closed at 6,389, just shy of the all-time high achieved last month.  Elevated investor sentiment normally benefits growth stocks, such as those in the technology sector.  As such, the tech-heavy NASDAQ returned 3.9% and closed at a record high.

Apple (AAPL) emerged as a standout performer, capturing headlines with its remarkable 13% weekly surge following CEO Tim Cook’s high-profile White House visit. AAPL’s rise was its largest weekly gain in more than five years.  The company announced a $100 billion investment commitment in American companies and parts over the next four years.  As a result, President Trump announced Apple would be exempt from future tariffs on imported chips.  The company previously warned investors that it could face $1 billion in quarterly charge-offs without such exemptions.

The Artificial Intelligence (AI) narrative continued to drive market enthusiasm, exemplified by Palantir’s (PLTR) exceptional earnings results. Palantir stock advanced nearly 8% Tuesday after the software analytics provider lifted its full-year outlook. The company achieved a milestone by surpassing $1 billion in quarterly revenue, with revenues growing 48% year-over-year. CEO Alex Karp’s characterization of the results as a “once in a generation, truly anomalous quarter” underscored the transformative impact of AI adoption across both government and commercial sectors.

This week magnified growth stocks’ outperformance of their value counterparts. The Russell 3000 Growth index has returned 11.0% year-to-date, while the Russell 3000 Value index has returned 6.3%. Growth leadership marks a complete reversal from Liberation Day in early April, when value stocks held a +11.5% advantage. This rotation reflects renewed confidence in innovation-driven companies, as AI adoption accelerates across industries.

Markets have also demonstrated increasing resilience to geopolitical and trade policy uncertainties. Global markets have largely been indifferent to President Trump’s latest tariffs, a sharp departure from the steep selloff triggered by his April 2 announcement. Despite recent tariff threats, including 50% on Indian goods, major equity indices have posted strong gains. Markets continue viewing tariff announcements as negotiating tactics rather than permanent policy shifts.

Investors will continue to look toward earnings results for tariff impacts and AI productivity gains.  Strong profit growth will be needed to support historically high equity valuations.  PLTR for example trades at an astonishing 246x forward earnings, more than ten times the 22x level of the S&P 500.