Wall Street’s main indexes rose on Friday for their fifth consecutive day of gains, buoyed by the U.S.-China tariff truce announced earlier in the week. Despite this positive news, economic survey data showed a decline in consumer sentiment, which added some caution to the market rally.
Tariff Truce and Consumer Sentiment
The S&P 500 steadily added to gains from late morning, with investors largely brushing off the weak economic data. The University of Michigan Surveys of Consumers revealed that the Consumer Sentiment Index dropped further in May, while one-year inflation expectations surged to 7.3%, up from 6.5% last month. Despite the data, all three main indexes posted weekly gains, following a steep rally on Monday after the U.S. and China agreed to a 90-day pause in their escalating trade war.
Market Optimism Amid Trade De-Escalation
Lindsey Bell, chief market strategist at Clearnomics, noted that Friday’s advance was a continuation of the positive market movement following the de-escalation in the trade conflict between the U.S. and China. She also cautioned that with a solid economy but pessimistic investors, more volatility could lie ahead as tariff headlines continue to emerge. Bell emphasized that “data could change in coming months,” and warned, “I don’t think we’re out of the woods yet. We’re going to have to take it on a day-by-day, week-by-week basis.”
Waiting for Clarity on Tariffs and Tax Policy
Paul Christopher, head of global investment strategy at Wells Fargo Investment Institute, expressed cautious optimism about the softening stance on trade, but stated that the market is still waiting to see how the U.S. will eventually approach tariffs. “We haven’t even begun to see what happens when those tariffs really bite, when firms have to raise their prices to consumers and consumers see fewer goods and less variety on the shelves,” said Christopher. Meanwhile, investors were also left waiting for clarity on U.S. tax policy, as President Trump’s sweeping tax bill failed to clear a key procedural hurdle in Congress.
Market Performance
Despite concerns over trade and policy, Wall Street’s main indexes showed strong performance:
- The Dow Jones Industrial Average rose 331.99 points, or 0.78%, to 42,654.74
- The S&P 500 gained 41.45 points, or 0.70%, to 5,958.38
- The Nasdaq Composite climbed 98.78 points, or 0.52%, to 19,211.10
As the market navigates these uncertainties, investors are closely watching developments in trade and policy that will continue to shape the economic landscape.
