Major Indexes Post Gains Despite Tariff Concerns
U.S. stocks closed higher Friday, capping a volatile week with the market’s third weekly gain in the last four. The S&P 500 rose 0.8% to finish just shy of its record set last week, erasing losses from the prior week’s decline. The Dow Jones Industrial Average gained 0.5%, while the Nasdaq composite added 1% to extend the all-time high it reached Thursday.
Technology shares led the rally, with Nvidia up 1.1% and Apple climbing 4.2%. Strong corporate earnings also lifted sentiment. Gilead Sciences surged 8.3% after beating earnings expectations and raising its full-year profit forecast. Expedia Group rose 4.1% on better-than-expected quarterly results. However, some companies cautioned that current tariffs could weigh on profits going forward.
Economic Data and Fed Policy in Focus
Investors are closely watching Federal Reserve policy as signs emerge of a slowing economy. Recent reports showed inflation edging higher in June and U.S. hiring slowing in July. While lower interest rates could support growth and asset prices, they also risk fueling inflation. The Fed has kept its benchmark rate steady but faces mounting pressure from President Donald Trump to cut rates.
Wall Street expects the Fed to lower rates by a quarter percentage point at its September meeting. The president’s nomination of Stephen Miran, an economic adviser and likely supporter of rate cuts, to the Fed’s board could further influence policy direction. Upcoming reports on consumer and wholesale inflation, along with retail sales data, are expected to guide market sentiment in the week ahead.
Markets Show Resilience to Tariff Escalation
The week’s trading unfolded against the backdrop of Trump’s latest escalation in the trade war, which introduced higher import taxes on dozens of countries. Despite the potential economic risks, equities appeared largely unaffected. Analysts suggested that the market may be growing less reactive to tariff headlines, focusing instead on earnings and economic fundamentals.
Elsewhere, Paramount Skydance fell 10.5% following the completion of its $8 billion merger, while Warner Bros. Discovery dropped 8%. In global markets, Asia closed mostly lower except for Tokyo’s Nikkei, which rose 1.9% after progress was reported on U.S. tariff issues. European markets ended the day mixed.
Bond Market and Index Performance
Treasury yields inched higher, with the 10-year yield rising to 4.28% from 4.25% and the two-year yield climbing to 3.76% from 3.73%. At the close, the S&P 500 was up 49.45 points at 6,389.45, the Dow gained 206.97 points to 44,175.61, and the Nasdaq rose 207.32 points to 21,450.02.
