U.S. stock markets closed higher on Friday as market participants’ fear on escalating global trade tensions easy to some extent. Investors have ignored disappointing economic data. All three major stock indexes ended in positive territory. For the last week, these indexes finished in positive zone.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 0.8% or 331.99 points to close at 42,654.74. The blue-chip index re-entered in positive zone for 2025. Notably, 26 components of the 30-stock index ended in positive territory and 4 finished in negative zone.
The tech-heavy Nasdaq Composite finished at 19,211.10, rising 0.5% due to strong performance of technology bigwigs. Tech giants like Alphabet Inc. GOOGL and Micron Technology Inc. MU rallied 1.4% and 2.7%, respectively. Both Alphabet and Micron Technology currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The S&P 500 was up 0.7% to finish at 5,958.38. The benchmark posted a five-day winning run. Eight out of 10 broad sectors of the broad-market index ended in positive territory and one in negative zone. The Utilities Select Sector SPDR (XLU) and the Health Care Select Sector SPDR (XLV) rose 1.5% and 2%, respectively.
The fear-gauge CBOE Volatility Index (VIX) was down 3.3% to 17.24. A total of 17.61 billion shares were traded on Friday, higher than the last 20-session average of 17.04 billion. Advancers outnumbered decliners on the NYSE by a 2.72-to-1 ratio. On Nasdaq, a 1.74-to-1 ratio favored advancing issues.
U.S.- China Trade Truce
After two days of high-level negotiations, the United States and China have decided to for a 90-day pause of tariff implementations. On May 12, the United States and China agreed in a discussion in Switzerland to reach a temporary agreement that “reciprocal” tariffs between both countries will be cut from 125% to 10%. Meanwhile, United States’ 20% tariffs on Chinese imports relating to fentanyl will remain intact, meaning total tariffs on China will be 30%.
U.S. stock markets have faced massive volatility ever since President Donald Trump imposed a 10% baseline tariff on each and every country with which it trades. Tariff rates were much higher for several major trading partners of the United States.
Economic Data
The U.S. Census Bureau and the U.S. Department of Housing and Urban Development jointly announced that housing starts in April came in at 1.361 million units, missing the Zacks Consensus Estimate of 1.373 million units. The data for March was revised upward to 1.339 million units from 1.324 million units reported earlier.
Building permits in April came in at 1.412 million units, missing the Zacks Consensus Estimate of 1.45 million units. The data for March was revised marginally downward to 1.481 million units from 1.482 million units reported earlier.
The University of Michigan reported that the preliminary index for consumer sentiment in May dropped to 50.8% from 52.2% in April. This marked the lowest reading for the index’s history. The sub-index for current economic condition fell to 57.6% from 59.8% in April. The sub-index for consumer expectations dropped to 46.5% from 47.3% in April. The 1-year inflation expectations climbed to 7.35 in May from 6.5% in April. The long-term inflation expectations rose to 4.6% in May from 4.45 in April.
Weekly Roundup
Last week was an impressive one for Wall Street. The Dow, the S&P 500 and the Nasdaq Composite rallied 3.4%, 5.3% and 7.2%, respectively. Stock prices of the AI-centric technology behemoths have jumped following positive news on U.S. – China trade truce.
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Micron Technology, Inc. (MU): Free Stock Analysis Report Alphabet Inc. (GOOGL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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