Leading stock market indexes opened in record territory, with investors buoyed by signs of progress on a U.S.-China trade deal.
Shortly after the start of trade on Friday, the S&P 500 rose 14 points, or 0.2%, to 6,155 points, surpassing its previous all-time closing high in February of 6,144. The index also briefly edged above its previous record on Thursday in intraday trading.
The Nasdaq Composite gained 62 points, or 0.3 %, to 20,227, topping its previous record high of 20,174 on Dec. 16, 2024. The Dow Jones Industrial Average rose 0.4% to 43, 627 but remains below its previous high of 45,014 on Dec. 4, 2024.
Markets have made a stunning turnaround since April, when the S&P 500 entered a bear market amid worries over the Trump administration’s tariff policies. In recent weeks, investor worries have eased amid calmer rhetoric on tariffs and forecasts that hopes that the Federal Reserve rate will lower interest rates, analysts told CBS MoneyWatch. A sharp rebound in technology stocks have also helped drive the rebound.
President Trump said at a White House event Thursday that Washington and Beijing had signed an agreement on trade, although details remain unclear. He added that he expects to have a deal with India soon.
David Lefkowitz, head of U.S. equities at UBS Global Wealth Management, thinks investors are pricing in reductions in both trade frictions and geopolitical tensions.
“We think the recovery makes sense, considering that most large-cap companies should weather the tariffs reasonably well. In fact, we think the upcoming [second-quarter] earnings season will once again highlight the resilience of corporate profits,” he told investors in a note.
Despite the renewed optimism, Wall Street analysts warn that financial markets could still face a bumpy road ahead.
“We think there’s a dangerous amount of complacency on trade/tariffs, a view underscored by the fact markets this morning are celebrating the China ‘deal’ for a third time,” Vital Knowledge analyst Adam Crisafulli said in a report.
As the stock market rallied Friday, investors digested new inflation data from the Commerce Department, which indicated that prices rose 2.3% in May compared with a year ago, up from just 2.1% in April.
Core inflation — which excludes the more volatile food and energy categories — rose 2.7% from a year earlier, an increase from 2.5% the previous month.
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