U.S. stocks experienced a significant rally on Friday, concluding a volatile week on an optimistic note as prospects for a U.S.-China trade agreement buoyed investor confidence. The S&P 500 advanced by 1.8%, the Nasdaq increased by 2%, and the Dow surged by 618 points. This optimism was fueled after the White House indicated President Trump is "optimistic" about China engaging in a trade deal, despite escalating trade tensions marked by Trump's tariff hike on Chinese imports to 145% and China's reciprocal 125% duty on U.S. goods.
On the economic landscape, the University of Michigan's survey reported consumer sentiment at its lowest level since 2022, with inflation expectations reaching levels unprecedented since 1981. As earnings season commenced, there were varied results from the banking sector—Wells Fargo saw a decline of 1%, Morgan Stanley experienced a rise of 1.4%, and JPMorgan achieved a 4% increase following the announcement of record revenue. Over the week, the S&P 500 expanded by 5.7%, the Nasdaq soared by 7.3%, and the Dow climbed nearly 5%, marking their strongest weekly performances in over a year, propelled by a historic rally on Wednesday.
