U.S. stocks edged higher Friday, capping off a solid week as major indexes hovered near record levels reached earlier this year. The S&P 500 was up 0.2% in midday trading, potentially marking its fifth consecutive daily gain. For the week, it’s on pace to climb 4.7%, its third winning week out of the last four. Investor optimism is growing that President Donald Trump may roll back tariffs now that new trade deals are being made.
Those hopes have helped push the S&P 500 within 3.5% of its February record, rebounding from a nearly 20% decline it saw just last month. Meanwhile, the Dow Jones Industrial Average was up 32 points, or 0.1%, around 11:30 a.m. Eastern, and the Nasdaq rose 0.1%.
Trump’s ongoing trade battles had rattled global markets due to two main concerns: tariffs could either slow down economic growth or trigger rising inflation. But recent developments helped ease some of those fears. The U.S. and China agreed to a 90-day pause on many of their tariffs, and domestic inflation data came in better than expected.
Economists at Bank of America called it “a week to remember” but warned that market volatility is unlikely to fade anytime soon. They noted that major uncertainties remain around how tariffs will ultimately affect both economic growth and inflation.
These uncertainties are already impacting U.S. businesses and households, leading some to potentially delay spending or long-term planning—moves that could weaken economic momentum. A University of Michigan survey showed consumer sentiment fell again in May, though the decline wasn’t as sharp as in previous months.
Of greater concern, inflation expectations among consumers keep rising. The survey found that Americans now anticipate inflation to hit 7.3% over the next year, up from 6.5% a month earlier. When inflation expectations climb like this, it can trigger behavior that feeds further price increases.
It’s worth noting that only a portion of the survey data was collected after the U.S.-China tariff truce was announced, so more complete data could offer a clearer picture in the coming weeks.
On the corporate front, Charter Communications shares rose 1.4% after announcing a merger with Cox Communications. The combined entity, which will adopt the Cox Communications name, will be headquartered in Stamford, Connecticut.
Meanwhile, Novo Nordisk’s U.S.-traded shares dropped 1.8% after the company revealed CEO Lars Fruergaard Jørgensen will step down. The drugmaker, known for its weight-loss medication Wegovy, cited recent market pressures and the stock’s recent performance as factors behind the leadership change.
In bond markets, yields were mixed. The 10-year Treasury yield slipped to 4.43% from 4.45% on Thursday and over 4.50% earlier in the week. Lower yields generally support higher stock valuations. The two-year Treasury yield, which reflects short-term interest rate expectations, ticked up slightly to 3.97% after earlier falling to 3.93%, following the inflation data release.
Investors are hoping that softer inflation numbers might allow the Federal Reserve to cut interest rates later this year, especially if economic strain from tariffs intensifies.
Globally, stock markets were mixed with slight movements across Europe and Asia. Japan’s Nikkei 225 dipped just under 0.1% after data showed the country’s economy contracted more than expected in the first quarter.
