S&P 500 Ends Strong Week, With Bear Market in Sight – US Market Wrap

Wall Street’s hopes that Trump’s tariff war is winding down drove stocks to their second-best week in 2025, with the S&P 500 rising for a fifth straight session despite a weak reading on consumer sentiment.

Equities rose further after the Financial Times reported that the United States and the European Union had broken their trade impasse to allow for tariff talks, boosting optimism about negotiations with America’s top trading partners. That comes after a recent truce with China fueled the risk-on sentiment that propelled the stock benchmark to the verge of a bull market, rising nearly 20% from its April low.

The renewed optimism has pushed the S&P 500 up more than 5% since last Friday. Bond market action was muted, but Treasuries fell for the third week in a row, the longest slide this year. The dollar rose despite data showing the most negative sentiment among options traders in five years.

Earlier this year, US equities fell out of favor as Trump attempted to shake up global trade. However, there are signs that investors are returning. According to EPFR Global data cited by Bank of America Corp., fund managers added approximately $20 billion to American stock funds in the last week, the region’s first inflow in more than a month.

Trump said he would set tariff rates for US trading partners “over the next two to three weeks,” claiming that “150 countries want to make a deal.” While investors are unsure how negotiations will proceed, the lack of bad news on the trade front helped to boost market sentiment.

Traders were able to ignore data showing that US consumer sentiment unexpectedly fell while inflation expectations soared to multidecade highs. Given the recent de-escalation of trade tensions with China, Capital Economics’ Alexandra Brown predicts a significant boost in sentiment next month.

The S&P 500 increased by 0.7%. The Nasdaq 100 gained 0.4%. The Dow Jones Industrial Average rose 0.8%.
The yield on 10-year Treasuries rose one basis point to 4.44%.
The dollar gained 0.2%. Oil rose after Iran’s foreign minister downplayed the prospect of a breakthrough in nuclear talks with the United States.