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US stocks trod higher on Friday, on the cusp of fresh record highs as optimism over trade talks and bets on Fed rate cuts boosted spirits.
The S&P 500 (^GSPC) added 0.6% and was on pace to close at its first record high since February. The benchmark index touched a new record intraday high just after the open.
The Nasdaq Composite (^IXIC) also moved up around 0.6%, also touching a record intra-session high and pacing for its own record close. Meanwhile, the Dow Jones Industrial Average (^DJI) added 0.7%, or over 300 points.
Stocks are poised to resume the week's march higher as markets embrace upbeat news after days of Mideast tensions and swirling tariff uncertainty. The S&P 500 closed on Thursday just a few points shy of setting a new all-time high, buoyed by rising expectations that the Fed will lower interest rates as early as July.
The latest reading of the Federal Reserve's preferred inflation gauge showed price increases accelerated in May as inflation remained above the Fed's 2% target. Fed Chair Jerome Powell has stressed an uptick in price pressures could be a stumbling block to a rate cut.
Markets got a boost on the trade front on Friday after President Trump said that the US and China have "signed" a trade deal. The two sides have cemented the tariff truce sealed last month in Geneva, and China has confirmed details of the agreed trade framework, per several media reports.
Under the pact, China has committed to delivering rare earth minerals to the US, Commerce Secretary Howard Lutnick told Bloomberg. Once that is underway, “we’ll take down our countermeasures,” he said.
Trade deals with 10 major US trading partners are imminent, according to Lutnick. Others on Trump's team have said that countries negotiating with the US will get an extension to the tariff pause, set to expire July 9. Treasury Secretary Scott Bessent on Friday said the US could complete the balance of its most important trade talks by Labor Day.
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S&P 500, Nasdaq open pacing for records
US stocks trod higher on Friday, on the cusp of fresh record highs as investors assessed a key inflation reading to test bets on interest-rate cuts and eyed progress toward a US-China trade deal.
The S&P 500 (^GSPC) added 0.2% and was on pace to close at its first record high since February. The Nasdaq Composite (^IXIC) moved up more than nearly 0.3%, also pacing for a record close. Meanwhile the Dow Jones Industrial Average (^DJI) added 0.4%, or nearly 200 points.
Big Tech stocks still 'below their peak’ — why the rally will continue
Fed's preferred inflation gauge shows price increases accelerated in May
The latest reading of the Federal Reserve's preferred inflation gauge showed price increases accelerated in May as inflation remained above the Fed's 2% target. The release comes as investors have been closely watching data releases for signs of when, or if, the Federal Reserve will cut interest rates this year.
The "core" Personal Consumption Expenditures (PCE) index, which strips out food and energy costs and is closely watched by the central bank, rose 2.7% on an annual basis, above the 2.6% economists had expected and higher than the 2.6% seen in April. The April reading was revised higher to 2.6% from an originally reported 2.5% increase.
Core prices rose 0.2% in May from the prior month, above the 0.1% economists had expected, which would have been in line with April's increase.
On a yearly basis, overall PCE increased by 2.3%, above the 2.2% increase from the month prior.
Nvidia stock rally puts $4 trillion market cap milestone into view
Nvidia stock (NVDA) continued to add to gains in premarket trading Friday, building on a rally that saw shares of the AI chipmaker reach fresh record highs this week.
Shares were up 0.5% an hour before the opening bell. Year to date, Nvidia stock is up more than 15%, marking a huge turnaround from earlier in the year when China's DeepSeek AI model and President Trump's trade wars weighed on shares.
With a current market capitalization of $3.78 trillion, Nvidia is considered the most valuable company in the world, surpassing Microsoft's (MSFT) $3.69 trillion market cap.
And Nvidia's breakout suggests a $4 trillion market cap may be within reach as the artificial intelligence boom continues full steam ahead. If the stock can keep powering higher, Nvidia would be the first company to reach that milestone.
Xiaomi stock pops as new SUV goes head-to-head with Tesla
Shares of Hong Kong-listed Xiaomi (1810.HK) popped 3.6% on Friday after the consumer electronics maker unveiled its new $35,000 SUV to compete with Tesla's (TSLA) Model Y vehicle in China.
Xiaomi's YU7 drew substantial buzz, collecting 289,000 preorders in its first hour of availability. It's a direct challenge to Tesla, and its 253,500 yuan price tag undercuts Tesla's Model Y by 10,000 yuan.
Tesla stock fell 0.4% in premarket trading. Tesla is also currently grappling with evaporating sales for its EVs in Europe and the firing of Omead Afshar, the head of sales and manufacturing in North America and Europe.
The open road ahead for investors
Nike's stock jumps as it forecasts smaller drops in profit, sales
Investors are finding glimmers of hope in Nike's (NKE) after-hours earnings report on Thursday.
The sneaker giant expects its sales decline to narrow in the current quarter — a single-digit percentage drop, versus the 12% fall in the three months to May 31.
While Nike expects a nearly $1 billion increase in costs from Trump's tariff hikes, the company laid out plans to lower its reliance on Chinese manufacturers for goods it sells in the US. China accounts for 16% of the shoes it imports into the US, per Reuters.
Shares jumped almost 10% in premarket trading on Friday.
Yahoo Finance's Brooke DiPalma reports:
Asian equities hit four year high, markets across region pump
Asian markets are bouncing back in a healthy fashion as the region swims through tariff shock and looks poised for a meteoric second half to 2025.
Bloomberg reports:
