Wall Street shakes off early losses to edge higher even as US-China trade tensions escalate

All three major indexes are poised to end the week with solid gains.

Following a weak start, Wall Street showed modest gains on Friday as investors assessed the latest moves on the global trade front, rounding off a chaotic week of sharp swings and shifting sentiment.

The S&P 500 edged up 0.2 percent, the Nasdaq Composite rose 0.4 percent, while the Dow Jones Industrial Average hovered near the flatline. After days of dramatic highs and lows, traders appeared to pause, weighing the longer-term implications of U.S. tariff policy and mounting global tension.

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Markets were still reeling from Thursday’s sharp sell-off, which erased much of Wednesday’s historic rally. The S&P 500 had slumped 3.46 percent, while the Dow plunged over 1,000 points, or 2.5 percent. The Nasdaq fared even worse, shedding 4.3 percent. A day earlier, those very benchmarks had posted one of their best performances since World War II, with the S&P 500 soaring 9.5 percent and the Dow jumping more than 2,900 points after President Donald Trump offered a temporary 90-day relief on select “reciprocal” tariffs.

But the relief proved fleeting. Volatility surged, with the CBOE Vix briefly spiking above 50 before settling closer to 44, underlining investor anxiety.

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Much of the nervousness stemmed from a major tariff shift. The White House this week scrapped its country-specific duties and introduced a blanket 10 percent levy—except for China. Imports from Beijing will now be hit with a punishing 145 percent duty. China hit back swiftly, raising tariffs on U.S. goods to 125 percent from 84 percent. “Even if the U.S. continues to impose higher tariffs, it will no longer make economic sense and will become a joke in the history of world economy,” said China’s finance ministry in a strongly worded statement.

In a sign of possible de-escalation, the European Union announced that its trade representative would travel to Washington on Sunday in an attempt to “try and sign deals,” offering a glimmer of hope to markets.

Despite the rollercoaster ride, the three main indexes are on track to finish the week in the green. The S&P 500 is heading for a 3.3 percent weekly gain—its strongest since November—while the Nasdaq is set to climb nearly 5 percent. The Dow, too, is on pace for a 2.7 percent rise.

JPMorgan Chase rose 4 percent after it posted stronger-than-expected revenue for the first quarter, while Morgan Stanley and BlackRock rose 1 and 1.3 percent respectively after they topped earnings estimates. Still, commentary from JPMorgan CEO Jamie Dimon underscored investor concerns—he warned that the U.S. economy faces "considerable turbulence" ahead.