Stocks were little changed on Friday, but ended both the week and month with gains, as investors shook off renewed tariff concerns from earlier in the session.
The Dow Jones Industrial Average (NYSE: DIA) added over 50 points, while the S&P 500 Index (NYSE: SPY) dipped below the flatline and Nasdaq Composite (NASDAQ: QQQ) declined over 0.3%.
President Donald Trump on Friday initially spooked market participants early Friday after he wrote in a post on his social media platform Truth Social that China had "violated" the tentative trade agreement with the United States. Those fears were also stoked by Bloomberg News reporting later in the session that the Trump administration plans to further sanction China's tech sector.
Most of the White House's tariffs are facing legal challenges in recent weeks, leading to widespread macroeconomic uncertainty as analysts and investors alike look for signs of a potential recession.
The Court of International Trade notably halted the majority of his levies enacted under presidential emergency powers on Wednesday. Those tariffs, however, were granted an appeal to stay on Thursday, allowing them to remain in effect until next week. The Wall Street Journal reported Friday that the Trump administration may use a provision of the Trade Act of 1974 to introduce tariffs of up to 15% for 150 days.
Despite that pessimistic backdrop, Wall Street has posted both a winning week and month, driven by positive momentum from early trade deal talks and concessions with key trading partners like China, the United Kingdom and the European Union. The S&P 500 and Nasdaq Composite each posted their best months since November 2023, rising 6.2% and 9.6%, respectively. The Dow, meanwhile, added nearly 4%.
For the week, the S&P 500 and Nasdaq each climbed about 2%, and the Dow rose 1.6%.
Consumers also grew more optimistic in May from the early signs of trade agreements, the University of Michigan's consumer sentiment survey showed Friday. Headline sentiment rose to 52.2 for the month, remaining flat from April's reading but coming in ahead of the month's preliminary reading. Sentiment is, however, down nearly 25% compared to a year ago.
"Sentiment had ebbed at the preliminary reading for May but turned a corner in the latter half of the month following the temporary pause on some tariffs on China goods," said Joanne Hsu, director of the Surveys of Consumers, in a statement. "Expected business conditions improved after mid-month, likely a consequence of the trade policy announcement."
"However, these positive changes were offset by declines in current personal finances stemming from stagnating incomes throughout May," Hsu continued. "Overall, consumers see the outlook for the economy as no worse than last month, but they remained quite worried about the future."