Stocks opened at record highs this Friday, fueled by optimistic investor sentiment surrounding potential trade deals and expectations of a forthcoming Federal Reserve interest rate cut. The S&P 500 surged, climbing 14 points, or 0.2%, to close at 6,155, marking a new all-time closing high surpassing its previous record of 6,144 established in February. This impressive performance wasn't a one-day event; the index briefly touched its record level on Thursday during intraday trading, demonstrating the sustained momentum driving the market’s upward trajectory. Similarly, the Nasdaq Composite also achieved a record high, gaining 62 points, or 0.3%, to reach 20,227, surpassing its previous peak of 20,174 set on December 16, 2024. The Dow Jones Industrial Average contributed to the positive trend, rising by 0.4% to 43,627, although it remains slightly below its historic high of 45,014 recorded on December 4, 2024.
This remarkable recovery from the bear market that began in April, triggered by concerns over the Trump administration’s tariffs, highlights the significant shift in investor confidence. Recent weeks have witnessed a calming of anxieties regarding tariffs, coupled with forecasts predicting a reduction in interest rates by the Federal Reserve. Analysts at CBS MoneyWatch attribute this turnaround to a sharp rebound in technology stocks, a sector heavily impacted by the initial downturn. President Trump’s announcement of a trade agreement between Washington and Beijing, while lacking specific details, further bolstered market optimism. He also indicated anticipated trade discussions with India. However, Wall Street analysts caution against excessive complacency, warning that financial markets could still encounter volatility.
As the market rallied, investors scrutinized new inflation data released by the Commerce Department. The data revealed that prices increased by 2.3% in May compared to a year ago, up from 2.1% in April. Core inflation, excluding volatile food and energy prices, rose from 2.5% to 2.7% over the same period. These figures, while still above the Federal Reserve’s target of 2%, signal a moderation in inflationary pressures, contributing to the positive market sentiment.
The Associated Press provided reporting for this article. Mary Cunningham, a reporter for CBS MoneyWatch, brings a strong background in business and finance reporting, having previously worked on investigative journalism projects for CBS News, including “60 Minutes” and CBSNews.com. Her expertise adds depth to her coverage of market trends and economic developments. This dynamic combination of factors – trade deal optimism, anticipated Fed policy, and a softening inflation outlook – is driving the current surge in stock prices, although a cautious approach remains warranted by seasoned financial professionals. The market’s resilience underscores the adaptability of investors and the potential for continued gains, provided that underlying economic conditions remain favorable. Continued monitoring of inflation data and Federal Reserve announcements will be crucial in shaping the market’s future direction.
