Wall Street rallies and US stocks recover much of Friday's wipeout

NEW YORK (AP) — U.S. stocks are rallying and recovering much of their sharp losses from last week, when worries about how President Donald Trump’s tariffs may be punishing the economy sent a shudder through Wall Street.

The S&P 500 jumped 1.1% in midday trading to claw back more than two thirds of Friday’s drop. The Dow Jones Industrial Average was up 426 points, or 1%, as of 11:45 a.m. Eastern time, and the Nasdaq composite was 1.5% higher.

Idexx Laboratories helped lead the way and soared 26.6% after the seller of veterinary instruments and other health care products reported a stronger profit for the spring than analysts expected. It also raised its forecast for profit over the full year.

Tyson Foods likewise delivered a bigger-than-expected profit for the latest quarter, and the company behind the Jimmy Dean and Hillshire Farms brands climbed 4.1%.

They helped offset a 2.8% drop for Berkshire Hathaway after Warren Buffett’s company reported a drop in profit for its second quarter from a year earlier. The weakening was due in part to the falling value of its investment in Kraft Heinz.

The pressure is on U.S. companies to deliver bigger profits after their stock prices shot to record after record recently. The jump in stock prices from a low point in April raised criticism that the broad market had become too expensive.

Stocks just sank to their worst week since May not so much on that criticism but on worries that Trump’s tariffs may be hitting the U.S. economy following a longer wait than some economists had expected. Job growth slowed sharply last month, and the unemployment rate worsened to 4.2%.

Trump reacted to the disappointing jobs numbers by firing the person in charge of compiling them. He also continued his criticism of the Federal Reserve, which could lower interest rates in order to shoot adrenaline into the economy. The Fed has instead been keeping rates on pause this year, in part because lower rates can send inflation higher, and Trump’s tariffs may be set to increase prices for U.S. households.

Friday’s stunningly weak jobs report did raise expectations on Wall Street that the Fed will cut interest rates at its next meeting in September. That caused Treasury yields to slump in the bond market, and they were mixed on Monday.