US stock market ends higher; S&P 500, Nasdaq hit record close on trade deal, US Fed rate cut hopes
US stock market ended higher on Friday, with the S&P 500 and Nasdaq recording their all-time closing highs, lifted by hopes of a US-China trade deal and US Federal Reserve interest rate cuts after soft economic data.
The Dow Jones Industrial Average rallied 432.43 points, or 1.00%, to 43,819.27, while the S&P 500 rose 32.05 points, or 0.52%, to 6,173.07. The Nasdaq Composite closed 105.55 points, or 0.52%, higher at 20,273.46. All three major US stock indexes posted weekly gains.
Among the 11 major sectors of the S&P 500, consumer discretionary was the top gainer, while energy shares were the laggards.
Upon reaching its record closing high, the tech-heavy Nasdaq confirmed it entered a bull market when it touched its post 'liberation day' trough on April 8, Reuters reported. The blue-chip Dow remained 2.7% below its record closing high reached on December 4.
US stock market gained as investors risk-appetite improved after Washington and Beijing reached an agreement to expedite rare-earth shipments from China to the US, a White House official said, well ahead of the July 9 expiration of the 90-day postponement of US President Donald Trump's 'reciprocal' tariffs, Reuters reported.
Additionally, US Treasury Secretary Scott Bessent said the administration's trade deals with 18 of the main US trading partners could be done by the September 1 Labor Day holiday.
On the NYSE, there were 347 new highs and 55 new lows. On the Nasdaq, 2,111 stocks rose and 2,342 fell as declining issues outnumbered advancers by a 1.11-to-1 ratio.
Nvidia share price gained 1.8%, edging closer to $4 trillion market capitalization, while Amazon shares rallied 2.85%. Micron Technology shears eased 0.98%, while Tesla stock price dropped 1.43%.
Nike shares jumped 15.2% after forecasting a smaller-than-expected drop in first-quarter revenue.
US consumer spending unexpectedly fell in May. Consumer spending, which accounts for more than two-thirds of economic activity, dropped 0.1% last month after an unrevised 0.2% gain in April. That was the second decline in consumer spending this year. Economists polled by Reuters had forecast consumer spending would edge up 0.1%.
A separate report from the University of Michigan confirmed consumer sentiment has improved this month, but remains well below December's post-election bounce.
Financial markets have priced in a 76% likelihood that the Fed will implement its first rate cut of the year in September, with a smaller, 19% probability of a rate cut coming as soon as July, according to CME's FedWatch tool.
(With inputs from Reuters)
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