Investing.com -- The S&P 500 climbed Friday, notching a big weekly gain, after shrugging off an unexpected dip in consumer sentiment as ongoing optimism about the recent U.S.-China trade continues to support sentiment.
At 4:00 p.m. ET (20:00 GMT), the Dow Jones Industrial Average rose 331, or 0.8%, while the S&P 500 index gained 0.7%, and the NASDAQ Composite climbed 0.5%.
The S&P 500 was up 5.3%, the Dow has gained 3.4%, and the Nasdaq Composite has jumped 7.2% this week, supported by U.S. and Chinese officials agreeing on a 90-day truce in their tariff measures at the start of the week, which eased investors’ fears of escalating global trade tensions and rising risk to the economy.
Consumer sentiment in surprise dip
The preliminary reading of the University of Michigan’s consumer sentiment survey for May was reported at 50.8, down from 52.2 in April, confounding expectations for a rise to 53.4.
Sentiment has been down almost 30% since January 2025. Meanwhile, 1-year inflation expectation from the survey surged to 7.3% versus 6.5% expected. The 5-10 year inflation expectation was 4.6%, versus 4.4% expected.
The impact of tariffs, albeit now much more tame than the those rolled on Apr. 2, will is expected to be reflected in economic data over the next few months, with some Wall Street warning of price pressures ahead.
"In raising tariffs, the administration touched the stove and found it hot. Inflation should pick up beginning in May, keeping the Fed on the sidelines in 2025," Morgan Stanley (NYSE:MS) said in a recent note.
Barclays (LON:BARC) no longer sees a U.S. recession
The trade agreement between Washington and Beijing has prompted Barclays to upwardly revise its U.S. growth forecasts, predicting that the world’s largest economy will not slip into a recession later this year.
It now expects the U.S. economy to grow 0.5% this year and 1.6% next year, the bank said in a note released late Thursday, up from previous forecasts of -0.3% and 1.5%, respectively.
Still, U.S. data released on Thursday showed soft retail sales as well as producer prices unexpectedly falling in April. The PPI figures came on the heels of a tame consumer price reading earlier in the week, cementing bets that the Fed is likely to cut rates at least twice this year.
Applied Materials falls on disappointing sales
In the corporate sector, Applied Materials (NASDAQ:AMAT) stock fell after the chipmaking equipment maker posted weaker-than-anticipated sales at its largest segment.
Revenue from its semiconductor systems unit, which accounts for the greatest part of its overall sales, came in at $5.26 billion, compared with estimates of $5.32 billion, according to LSEG data cited by Reuters.
Vistra Energy (NYSE:VST) stock rose after the electricity firm announced a $1.9 billion deal to buy natural gas assets, which are likely part of its ambition to generate electricity for artificial intelligence data centers.
Videogame publisher Take-Two Interactive Software (NASDAQ:TTWO) dropped after its annual bookings guidance missed estimates, following a delay in its hotly anticipated Grand Theft Auto VI title.
While the guidance fell short of estimates, Wedbush raised its price target on Take-Two Interactive Software to $269 from $253, citing many tailwinds ahead. "We believe the premium multiple is warranted because the company has many levers to pull to drive profits well above our estimates, including the higher price point for GTA VI, integration of the game into GTA Online, and significant margin expansion from its first-party web store," Wedbush said in a recent note.
Charter Communications (NASDAQ:CHTR) stock was higher after the cable company agreed to merge with Cox Communications, valuing Cox at $34.5 billion on an enterprise basis, one of the largest deals in the industry.
Constellation Brands (NYSE:STZ), meanwhile, climbed after Berkshire Hathaway (NYSE:BRKa)’s latest regulatory filings showed the conglomorate double its stake in the beer company.
(Ambar Warrick and Peter Nurse contributed to this article)