Leading stock market indexes opened in record territory, with investors buoyed by signs of progress on a U.S.-China trade deal.
By midday Friday, the S&P 500 was up 43 points, or 0.7%, to 6,184, above its previous all-time closing high in February of 6,144. The index, which also briefly edged above its previous record on Thursday in intraday trading, has jumped roughly 25% since President Trump announced his “Liberation Day” tariffs on April 2.
The Nasdaq Composite gained 120 points, or 0.6 %, to 20,288, topping its previous record closing high of 20,174 on Dec. 16, 2024. The Dow Jones Industrial Average rose 1.3% to 43,952 but remains below its previous high of 45,014 on Dec. 4, 2024.
Favorable trade headlines have helped stocks extend their gains on Friday, Vital Knowledge analyst Adam Crisafulli said in a report. President Trump said at a White House event Thursday that Washington and Beijing had signed an agreement on trade, although details remain unclear. He added that he expects to have a deal with India soon.
Treasury Secretary Scott Bessent has also suggested the Trump administration might push back the July 9 reciprocal tariff deadline. In a Fox Business interview on Friday, he said the U.S. “could have trade wrapped up by Labor Day” — the first indication that the timeline for trade negotiations could shift.
David Lefkowitz, head of U.S. equities at UBS Global Wealth Management, thinks investors are pricing in reductions in both trade frictions and geopolitical tensions.
“We think the recovery makes sense, considering that most large-cap companies should weather the tariffs reasonably well. In fact, we think the upcoming [second-quarter] earnings season will once again highlight the resilience of corporate profits,” he told investors in a note.
Despite the renewed optimism, Wall Street analysts warn that financial markets could still face a bumpy road ahead.
“We think there’s a dangerous amount of complacency on trade/tariffs, a view underscored by the fact markets this morning are celebrating the China ‘deal’ for a third time,” said Crisafulli in a report.
As the stock market rallied Friday, investors digested new inflation data from the Commerce Department, which indicated that prices rose 2.3% in May compared with a year ago, up from just 2.1% in April.
Core inflation — which excludes the more volatile food and energy categories — rose 2.7% from a year earlier, an increase from 2.5% the previous month.
contributed to this report.
