Rich Asplund
7 min read
In This Article:
The S&P 500 Index ($SPX) (SPY) Friday closed up +0.52%, the Dow Jones Industrials Index ($DOWI) (DIA) closed up +1.00%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +0.39%. September E-mini S&P futures (ESU25) are up +0.42%, and September E-mini Nasdaq futures (NQU25) are up +0.34%.
Stock indexes Friday settled higher, with the S&P 500 and Nasdaq 100 posting new all-time highs, and the Dow Jones Industrials posting a 3-3/4 month high. Positive trade news buoyed stocks Friday as the US moves closer to trade deals with China and other trading partners. Stocks also found support on Friday after the University of Michigan’s US June consumer sentiment index improved, as inflation expectations unexpectedly declined.
US Commerce Secretary Lutnick said that the US and China had finalized a trade understanding reached last month in Geneva, including a commitment from China to deliver rare earth materials. China’s Commerce Ministry also confirmed the agreement and stated that it will review and approve eligible applications for the export of controlled items, and the US will cancel the restrictive measures taken against China. In addition, Commerce Secretary Lutnick said the White House has imminent plans to reach agreements with a set of 10 major trading partners ahead of a July 9 deadline for reciprocal tariffs. Meanwhile, the Treasury Department announced a deal with G-7 countries that will exclude US companies from some taxes imposed by other countries in exchange for removing the “revenge tax” proposal from President Trump’s tax bill.
However, stocks fell back from their best levels on Friday afternoon after President Trump announced he was ending all trade talks with Canada over its digital services tax and threatened to impose new tariffs on the country within the next week. Gains in stocks were also limited on Friday’s weaker-than-expected US May personal spending and income reports, as well as the stronger-than-expected May core PCE price index.
US May personal spending unexpectedly fell -0.1% m/m, weaker than expectations of a +0.1% m/m increase. May personal income unexpectedly fell -0.5% m/m, weaker than expectations of +0.3% m/m and the biggest decline in more than 3-1/2 years.
The US May core PCE price index, the Fed’s preferred gauge of underlying inflation, rose +0.2% m/m and +2.7% y/y, stronger than expectations of +0.1% m/m and +2.6% y/y.
The University of Michigan US Jun consumer sentiment index was revised upward by +0.2 to 60.7, stronger than expectations of no change at 60.5.
