Quick overview

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All three major Wall Street indices rose on Friday, extending their gains for the week.

The S&P 500 pushed further into positive territory for the year, as investors remained encouraged by easing trade tensions—despite a sharp drop in consumer sentiment.

The Dow Jones Industrial Average, composed of 30 blue-chip stocks, gained 0.78% to close at 42,654.74. The S&P 500, which tracks the largest U.S. companies, rose 0.70% to 5,958.38, while the tech-heavy Nasdaq Composite added 0.52% to finish at 19,211.10.

Consumer Confidence Takes a Hit

The University of Michigan’s preliminary consumer sentiment index for May came in at 50.8—down from April’s 52.2 and well below expectations of 53.4. Sentiment has now fallen nearly 30% since January 2025.

Inflation expectations also surged. One-year inflation expectations jumped to 7.3%, significantly above the 6.5% forecast. Longer-term inflation expectations (5–10 years) climbed to 4.6%, versus the anticipated 4.4%.

While the recent U.S.-China tariff agreement significantly reduced near-term trade tensions, analysts expect lingering inflationary pressures could begin to show in upcoming economic data. The new deal provides a 90-day pause in tariff escalation, fueling hopes for a more lasting resolution to the trade dispute.

Weekly Gains Across the Board

For the week, the Dow rose 3.41%, the S&P 500 gained 5.27%, and the Nasdaq led with a 7.15% surge. Despite the strong performance, the Nasdaq remains slightly down for the year (-0.52%), while the Dow and S&P 500 are up 0.26% and 1.30%, respectively.