Stocks rose higher Friday as investors continue to weigh the risks of President Donald Trump's trade policies with disappointing consumer sentiment data. The Dow Jones Industrial Average climbed over 600 points, while the S&P 500 Index and Nasdaq Composite advanced 1.8% and 2%, respectively.
Here's how the market settled to close out the week:
S&P 500 Index
Dow Jones Industrial Average
Nasdaq Composite Index
Consumer Sentiment grew more pessimistic in April, the University of Michigan's survey showed Friday, as inflation expectations surged to their highest level since 1981. The survey's preliminary reading saw headline sentiment drop nearly 11% to 50.8 from 57.0 in March. The reading was the survey's lowest since June 2022 and marked a 34.2% annual decline.
One-year inflation outlooks jumped to 6.7%, the highest level since November 1981, rising from March's final print of 5%. Looking five years ahead, consumers expect inflation to grow by 4.4%, the highest level since June 1991.
Moreover, the current economic conditions index dropped 11.4% month-to-month to 56.5 in April, while the expectations index fell by 10.3% to 47.2. On an annual basis, these measures cratered 28.5% and 37.9%, respectively.
"Consumers report multiple warning signs that raise the risk of recession: expectations for business conditions, personal finances, incomes, inflation, and labor markets all continued to deteriorate this month," said Joanne Hsu, director of the Surveys of Consumers, in a statement. Hsu also noted that sentiment declines were seen across all demographics, including age, income and politics.
Wall Street has seen wild swings over the past few sessions in response to Trump announcing a 90-day pause on his "reciprocal" tariffs on many countries on Wednesday. Following the announcement, the Dow jumped more than 2,900 points and the S&P 500 rallied 9.52% for its third-largest gain in a single trading session post World War II.
All three major market averages also ended the week with gains, with the tech-heavy Nasdaq outperforming with a gain of 7%. The S&P 500 Index also advanced about 6%, while the Dow added over 5%. However, the broader market has given back much of its post-election gains from November after the White House announced the extreme tariff measures on April 2.
China on Friday raised its tariffs on U.S. imports to 125% from 85%, with the Chinese Finance Ministry stating that at their current level, "there is no longer a market for U.S. goods imported into China," and any more hikes from the Trump administration "will no longer make economic sense and will become a joke in the history of world economy," according to a translation provided by Google Translate.
The U.S. currently has a 145% duty on all goods imported from China, 25% tariffs on all aluminum, autos and goods from Canada and Mexico that are not covered by the United States-Mexico-Canada Agreement and a 10% charge on all other imports.
"While a 90-day pause on higher reciprocal tariffs is a welcome reprieve, by no means it marks the end of the story, in our view," Barclays strategist Emmanuel Cau wrote in a Friday note. "This week['s] events likely eroded further Trump's credibility with the financial community, and the extent of the damage to growth, while unknown yet, is likely to be significant."
Deutsche Bank research lead George Saravelos wrote on Friday that U.S. currency "is undergoing a process of rapid de-dollarization," citing the "continued and combined collapse in the currency and U.S. bond market as this week comes to a close."
The 10-year and 30-year U.S. Treasury yields rose around 4.5% and 5%, respectively, on Friday, adding to their steep rise seen throughout the week. Typically seen as a safe haven during times of instability, 10-year yield has notably risen more than 50 basis points after finishing last week around 4%, marking one of its biggest spikes on record as investors grow more uncertain about the direction of the U.S. economy in the coming years.
The dollar index also declined 1% on Friday, and is on track to end the week down about 3%.
New York Federal Reserve President John Williams lowered his outlook on the U.S. economy on Friday, raising his year-end inflation expectations to between 3.5% and 4% due to the expected impacts from Trump's trade policies. Williams now expects economic grow to slow "somewhat below 1%," this year and for the unemployment rate to climb to 5% due to reduced immigration and broad economic pressures on the job market.
"A key question is the extent to which this year's higher inflation spills over into subsequent years and how that may affect expectations," Williams said in a speech in Puerto Rico.
JPMorgan analyst Christopher Horvers wrote in a note on Friday that Trump's 90-day tariff pause is not going to do much to help for retailers, especially those who sell electronics and furniture.
"Our estimated tariff rates have actually stepped higher for most companies, driven by steep hikes on China, with [Best Buy
Horvers added that retailers that largely sell consumables should see the least margin pressure from the tariffs, while they may see operating profit headwinds from lower operating income rates. If companies pass the extra fees to consumers, Horvers sees high margin headwinds but little impact on earnings, while paying the costs for consumers forecasts significant earnings impacts.
On the Earnings Front:
JPMorgan Chase
"The economy is facing considerable turbulence (including geopolitics), with the potential positive of tax reform and deregulation and the potential negatives of tariffs and 'trade wars," ongoing sticky inflation, high fiscal deficits and still rather high asset prices and volatility," Dimon said in a statement.
Wells Fargo
The bank also purchased 44.5 million of its shares, worth $3.5 billion, during the quarter, and allocated $932 million for credit losses in response to increased economic uncertainty. CEO Charlie Scharf called for a "timely resolution," to Trump's trade war, as the bank prepares for "slower economic environment in 2025."
Morgan Stanley
CEO Ted Pick told analysts during the company's earnings call that some transactions in its pipeline have been paused in response to Trump's tariffs, as many initial public offerings and mergers have been halted in recent weeks.