U.S. stock markets experienced a significant increase on Friday, marking a record finish for the S&P 500 as it rebounded from the lows caused by tariff concerns earlier in the year. The S&P 500 climbed 0.5 percent, ending the week at 6,173.07, while the Nasdaq also reached an all-time high, gaining 0.5 percent to close at 20,273.46. The Dow Jones Industrial Average rose 1 percent, finishing at 43,819.27.
After a tumultuous start to the year following President Donald Trump’s tariff announcements, the S&P 500 has convincingly surged more than 20 percent since the lows in April. This rebound was fueled by the administration easing some tariffs and negotiating a limited agreement with China.
Despite a gloomy economic outlook indicated by recent data, which revealed a drop in the consumer confidence index and a revision of GDP figures showing more contraction than anticipated in the first quarter, investor sentiment remained strong. Bill Adams, chief economist for Comerica Bank, pointed out that consumer spending has slowed due to concerns over tariffs, but there are hopeful signs for improved unemployment and inflation rates in the latter half of the year.
The labor market continues to show resilience, with U.S. payrolls increasing by 139,000 in May, maintaining the jobless rate at a low 4.2 percent. Investors also reacted positively to Trump announcing a trade agreement with China after recent negotiations.
However, tensions arose on Friday when Trump unexpectedly ended trade talks with Canada over its plans for a digital services tax targeting major U.S. tech companies like Meta, Google, and Amazon. This situation caused brief volatility in the stock market, although the S&P 500 and Nasdaq quickly regained their footing.
John Creekmur, chief investment officer at Creekmur Wealth Advisors, noted that the market remains highly responsive to news and events, suggesting continued volatility due to ongoing trade negotiations. The administration aims to conclude 90 trade deals within a self-imposed timeline, though only one pact has been finalized thus far with the United Kingdom.
In a more optimistic note, analysts expressed hope about the ceasefire between Israel and Iran, indicating that U.S. oil exports have positioned the country to withstand potential disruptions in the Middle East. Additionally, the momentum in technology stocks fueled by advancements in artificial intelligence is contributing to market strength, with Nvidia’s stock reaching record levels after a positive earnings report in May.
Overall, while challenges persist, there are encouraging signs for the economy and investors, and the resilience of the stock market suggests a potential for growth amid the current uncertainty.