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US stocks rose on Friday, on track for 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%, touching a record intra-session high and pacing for its own record close. Meanwhile, the Dow Jones Industrial Average (^DJI) added 0.9%, or over 300 points.
Stocks rose as markets embraced 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 that 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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Foreign stocks are crushing US shares, even with the new record high
American investors are pumped about a new record high in the S&P 500 stock index. But the gains in US stocks are modest compared to the rise in global stocks.
Yahoo Finance's Rick Newman points out:
Palantir shares hit a wall as Middle East conflict eases
Palantir stock (PLTR) dropped more than 5% Friday, after President Trump said during the NATO Summit that the conflict in the Middle East was “over" for now.
Trump added, "Can it start again? I guess someday it can. It could maybe start soon."
Shares of Palantir had soared in early June after announcing a new $463 million contract to provide its AI software to the US Special Operations Command within the US military. The stock continued to rise after Israel first carried out airstrikes on Iran on June 12 and after the US carried out its own bombings on Iran’s nuclear sites later in the month. Palantir provides its AI software to the Israeli Defense Force.
“Shares of PLTR did seem to benefit from the tension and conflict in the Middle East, so with more quiet outlook for the region, PLTR may be giving some of those gains back,” DA Davidson analyst Gil Luria told Yahoo Finance.
In addition to the ceasefire between Israel and Iran, The Washington Post reports that there is a renewed push between Arab mediators and Israeli hostage families to negotiate an end to Israel's war on Gaza.
The drop also comes a day after protesters rallied outside of Palantir’s Palo Alto offices to oppose the company’s work with ICE amid Trump’s sweeping deportations.
In other news for Palantir, the company announced Thursday that it’s partnering with a nuclear power company, The Nuclear Company, to develop AI software to help build plants “faster and safer.”
Chip stocks set to see growing benefit from rising AI spending, JPMorgan says
JPMorgan analysts said in a report following a survey of 168 chief information officers that artificial intelligence spending is set to jump over the next three years, with positive implications for chip stocks.
According to the survey, AI-related computing hardware as a percentage of CIOs' IT budgets is set to rise to 15.9% in three years from 5.9% currently, the analysts wrote.
“The survey results support our view of a strong multi-year spending cycle in the AI infrastructure build-out and should continue to support sustained strong revenue growth for the AI beneficiaries,” the report said.
Those beneficiaries include chipmakers Advanced Micro Devices (AMD), Broadcom (AVGO), Marvell Technology (MRVL), Micron (MU), Arm (ARM), and Nvidia (NVDA), as well as producers of high-performance networking products for AI data centers such as Astera Labs (ALAB).
The PHLX Semiconductor index (^SOX) has come roaring back since hitting a low in April. The index is up more than 14% over the past month.
Meta, Microsoft, and Nvidia lead 'Magnificent 7' comeback
Of the “Magnificent Seven” tech stocks, three stand out.
Meta (META), Microsoft (MSFT), and Nvidia (NVDA) stocks have seen a remarkable turnaround from lows in April and lead the group for the year.
Meta is up nearly 25% for the year, while Microsoft and Nvidia are up around 18%.
Nvidia has roared back to hit new record highs each trading day since Wednesday and was set to end the trading week up more than 10%. The AI chipmaker and Microsoft have seen their market capitalizations balloon to nearly $4 trillion.
“We believe both Nvidia and Microsoft will hit the $4 trillion market cap club this summer and then over the next 18 months the focus will be on the $5 trillion club ... as this tech bull market is still early being led by the AI Revolution,” Wedbush’s Dan Ives wrote in a note to investors on Friday.
Nvidia’s market cap stood at $3.86 trillion Friday, while Microsoft’s was $3.71 trillion.
Amazon (AMZN) on Friday entered positive territory for the year for the first time since February, up roughly 0.2% in 2025 as of midday Friday. Despite recent gains, the other members of the Magnificent Seven remain negative for the year.
Last-minute changes appear to be making Trump's 'big, beautiful bill' more expensive by the day
Uber, Lyft downgraded by Canaccord as analyst says robotaxi future 'truly unclear'
Uber (UBER) and Lyft (LYFT) stocks both fell more than 2% on Friday after Canaccord Genuity analyst George Gianarikas downgraded the ride-hail platforms to Hold from Buy the prior day.
Gianarikas said it would take only 411,000 robotaxis to replace all Uber and Lyft drivers in the US.
“Now, we are not sure it all happens that quickly, but there is very much a non-zero probability that it does.”
While the platforms have been integrating robotaxis into their offerings — for example, Uber has partnered with Waymo, and Lyft with Mobileye and others — Gianarikas said that “hybrid” approach may not help them in a future robotaxi-dominated market.
"The challenge for UberLyft is how long a hybrid network will stay relevant, and then what value they can add over the long-term in a new paradigm," he wrote.
"The future could be bright: value added in the AV world through hybrid human-robot networks, strong on the ground operations, and other tactical elements," he added. "An alternative scenario is also plausible: a new world dominated by a few AV behemoths that control the value chain and leave UberLyft reflecting on the golden days of the past. It is truly unclear."
Why the terrible year for Google stock may be overblown
Yahoo Finance's Francisco Velasquez reports:
Read more here.
New inflation reading won't end rate-cut debate between Fed doves and hawks
Yahoo Finance's Jennifer Schonberger reports:
Read more here.
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:
