Wall Street's main indexes rose on Friday, pushing the benchmark S&P 500 and the tech-heavy Nasdaq to intraday record highs as investors pinned their hopes on deeper rate cuts from the Federal Reserve as well as trade deals with U.S. partners.
The S&P 500 (.SPX) and the Nasdaq Composite (.IXIC) both rose about 0.4%, surpassing their previous peaks touched in February and December, respectively. The Nasdaq looked on course for a new bull market, having recovered more than 20% from a trough in April due to tariff turmoil.
Shares of Nvidia (NVDA.O), the world's most valuable company, rose 0.7% to touch a record high, while other tech-heavyweights including Amazon.com (AMZN.O) and Apple (AAPL.O) rose 1.8% and 0.9%, respectively.
A Commerce Department report showed U.S. consumer spending fell unexpectedly in May as the boost from the preemptive buying of goods such as motor vehicles ahead of tariffs faded, while monthly inflation rose moderately.
"The numbers in general in terms of inflation are not anything that would change the course of the Fed at this time, and it still shows that inflation pretty much is going in the right direction," said Peter Cardillo, chief market economist at Spartan Capital Securities.
As the ceasefire in the Middle East holds, investor focus has turned to the prospect of a dovish Fed after the Wall Street Journal reported that U.S. President Donald Trump toyed with the idea of announcing Fed Chair Jerome Powell's replacement by September or October.
A spate of economic data this week, including a weaker-than-expected first-quarter GDP reading as well as jobless claims reaching multi-year highs, has supported the case for the central bank to cut borrowing costs this year.
Traders now price in an 18.6% chance of a rate cut in July, compared with 14.5% last week, according to CME Group's FedWatch tool.
Adding to the upbeat mood, Washington reached an agreement with China on expediting rare-earth shipments to the United States, a White House official said, days ahead of the July 9 deadline for Trump's "reciprocal" tariffs.
U.S. Treasury Secretary Scott Bessent said the Trump administration's trade deals with other countries could be done by the September 1 Labor Day holiday, citing the country's 18 main trading partners.
At 09:55 a.m. ET, the Dow Jones Industrial Average (.DJI) rose 262.05 points, or 0.60%, to 43,648.89, the S&P 500 (.SPX) gained 25.52 points, or 0.42%, to 6,166.54, and the Nasdaq Composite (.IXIC) gained 79.63 points, or 0.40%, to 20,247.54.
The benchmark S&P 500 (.SPX) and the Nasdaq (.IXIC) are on track for their best weekly performance in more than a month, while the blue-chip Dow (.DJI) is set for a weekly advance if gains hold.
UBS Global Wealth Management raised its year-end target for the S&P 500 to 6,200 from its prior forecast of 6,000, banking on softening trade uncertainty.
Nike's (NKE.N) shares rose 15.6% after it forecast a smaller-than-expected drop in first-quarter revenue.
Retailer Lululemon Athletica (LULU.O) rose 1.9% after Nike's results, while Hoka-owner Deckers Outdoor (DECK.N) added 2.8%.
Advancing issues outnumbered decliners by a 1.74-to-1 ratio on the NYSE and by a 1.11-to-1 ratio on the Nasdaq.
The S&P 500 posted 15 new 52-week highs and one new low, while the Nasdaq Composite recorded 46 new highs and 23 new lows.
