Damian J. Troise, AP Business Writer
NEW YORK (AP) – Stocks rose in Friday afternoon trading, bringing Wall Street back on track and closing a new all-time high week.
The S&P 500 is up 0.7%, set to surpass records reached in February. The Nasdaq composite has risen by 0.6% and is on track for the record. The Dow Jones industrial average rose to 43,898 to 1.2% (510 points) as of 12:13 pm in the East.
The S&P 500 record marks a sharp turnaround several months ago. A key measure of Wall Street health fell nearly 20% from the high in February, due to fears that President Donald Trump’s trade policies could harm the economy.
Profits were wide on Friday, with almost every sector within the S&P 500 rising. Nike rose 18.5% for its best profit in the market despite warning of a sharp blow from tariffs.
The broader market appears to be shaking fears that the Israeli-Iran war will disrupt the global supply of crude oil and send prices higher. A ceasefire between the two countries is still in place.
Prices for US crude oil remained largely unchanged on Friday. Prices have dropped to pre-dispute levels.
Investors are also monitoring potential developments in trade disputes between the US and the world, particularly China. The United States and China have signed a trade agreement that will facilitate American companies to acquire magnets and rare earth minerals from China, which are essential for manufacturing and microchip production, U.S. Treasury Department’s Scott Bescent said Friday.
China’s Commerce Ministry also said that both sides have “confirmed further details of the framework” for trade talks. However, the statement did not expressly mention an agreement to ensure access to rare earths.
Friday’s inflation update showed prices rose in May, but the rates were in line with the economists’ predictions that are largely in line with.
Inflation is a major concern for businesses and consumers. Trump’s elevated customs policy made it difficult for businesses to make predictions. It also puts more pressure on consumers who are already stubbornly concerned about inflation. A long list of companies, from automakers to retailers, warns that higher import taxes are likely to undermine revenue and profits.
The US has a 10% baseline tariff on all imports, with higher rates for Chinese goods and other import taxes on steel and automobiles. Analysts and economists hope that the impact will grow as import taxes continue to move towards consumers through businesses, but the economy and consumers remain somewhat resilient under these tariffs.
“We would have already hoped to pass a little more on the inflation statistics, but we expect these effects to manifest in more meaningful ways in the coming months.”
The more serious tariff threat lies in the economy. The current suspension in the round of retaliatory tariffs on the long list of countries is set to expire in July. Failure to negotiate a transaction or not postpone further tariffs could cause investors and consumers to rattle again.
The Federal Reserve monitors the tariff situation with a major focus on inflation. Inflation rates are stubbornly sitting just above the central bank’s 2% target. According to a report on Friday, its priority gauge, the Personal Consumption Expense Index, rose to 2.3% in May. That’s from 2.1% of the previous month.
The Fed cut interest rates twice in late 2024, following a historic series of interest rate hikes to cool inflation. PCE was 7.2% in 2022, but the more commonly used consumer price index reached 9.1%.
The Fed has not so far cut in 2025 regarding concerns that tariffs could reignite inflation and hinder the economy. Economists expect to cut interest rates at least twice by the end of the year.
Bond yields are relatively stable. The 2010 Treasury yield rose to 4.25% from 4.24% in the second half on Thursday. The two-year Treasury yields tracked more closely expectations about what the Federal Reserve will do, rising from 3.72% to 3.73% later on Thursday.
European stocks were mostly high, Asian stocks were mixed.
Original issue: June 27, 2025 9:45am EDT
