Wall Street set for weekly gains on trade deal

NEW YORK: Wall Street’s main indexes were up on Friday and on track for weekly gains, buoyed by the US-China tariff truce earlier in the week while soft consumer sentiment data on the day kept risk-taking in check.

The S&P 500 added to gains as the session wore on but stocks briefly lost ground in morning trading after the University of Michigan Surveys of Consumers said its Consumer Sentiment Index slumped further in May while one-year inflation expectations surged to 7.3% from 6.5% last month.

All three main indexes were poised for weekly gains and the S&P 500 was set for a fifth consecutive single-day gain – including its biggest gain on Monday – after Washington and Beijing agreed to a 90-day pause in their escalating trade war. This was days after Trump and British Prime Minister Keir Starmer had announced a limited bilateral trade agreement.

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“It’s probably a combination of waiting for the Fed, waiting for Congress and waiting for a new trade deal,” said Paul Christopher, head of global investment strategy at Wells Fargo Investment Institute.

Describing the market as “cautiously optimistic” due to the Trump administration’s softening stance on trade, Christopher noted that the size and impact of where the US eventually lands on tariffs is still a big unknown.

“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,” he said.

Investors were also left waiting for clarity on US tax policy as Trump’s sweeping tax bill failed to clear a key procedural hurdle as hardline Republicans demanding deeper spending cuts blocked the measure in a rare political setback for the Republican president in Congress.

The Dow Jones Industrial Average .DJI rose 283.76 points, or 0.67%, to 42,606.51, the S&P 500 .SPX gained 30.81 points, or 0.52%, to 5,947.74 and the Nasdaq Composite .IXIC gained 64.00 points, or 0.33%, to 19,176.28.

On Tuesday, the S&P 500 .SPX climbed back into the green on a year-to-date basis for the first time since late February. Still, the benchmark index remains more than 3% shy of its February record close.

Among the S&P 500’s 11 major industry sectors, healthcare .SPXHC was the biggest gainer after a volatile week.

Unitedhealth Group Inc UNH.N regained some ground, up 5.6%, after eight straight days of steep losses. Investors said they were warily expecting strategic changes at the insurer after the Wall Street Journal reported it was under a criminal probe by the Justice Department.

The biggest sector loser was energy .SPNY, down 0.4%.

Megacap and growth stocks were mixed, with Alphabet GOOGL.O advancing more than 1%, while Meta Platforms META.O fell more than 1%.

Applied Materials AMAT.O slipped 5.8% after the provider of equipment for chip manufacturing missed estimates for second-quarter revenue.

Charter Communications CHTR.O was up 1.3% after the cable company said it would buy privately held rival Cox Communications for $21.9 billion.

Shares in Verizon CommunicationsVZ.N were up 1% after the Federal Communications Commission said Friday it was approving its $20 billion purchase of fiber-optic internet provider Frontier Communications FYBR.O after the largest US telecom company agreed to end its diversity, equity and inclusion programs.

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Advancing issues outnumbered decliners by a 2.36-to-1 ratio on the NYSE, where there were 156 new highs and 23 new lows.

On the Nasdaq, 2,801 stocks rose and 1,527 fell as advancing issues outnumbered decliners by a 1.83-to-1 ratio. The S&P 500 posted 25 new 52-week highs and no new lows while the Nasdaq Composite recorded 57 new highs and 67 new lows.