A trader works on the floor at the New York Stock Exchange on May 12, 2025.
Brendan McDermid | Reuters
The S&P 500 rose Friday after posting a four-day rally in the prior session on the back of U.S. and China’s temporary tariff cuts and encouraging inflation reports.
The broad market index traded 0.1% higher, while the Nasdaq Composite advanced 0.2%. The Dow Jones Industrial Average slipped 74 points, or 0.2%.
Stocks have made a strong comeback since U.S. and Chinese officials earlier this week agreed on a 90-day truce in their tariff measures, which eased investors’ fears of escalating global trade tensions and rising risk to the economy.
Week to date, the S&P 500 is up 4.5%, and the Dow has gained 2.6%. The Nasdaq Composite has jumped more than 6% this week. Both the S&P 500 and Dow closed higher on Thursday, while the Nasdaq fell slightly.
Friday could see an uptick in volatility on Wall Street due to a large amount of options contracts that are set to expire. Goldman Sachs estimated that more than $2.8 trillion of notional options exposure will expire on Friday, the biggest such number on record for a May trading day.
“We believe we are entering a new market regime where volatility will be higher and the mega-cap tech stocks will not simply dominate market performance,” said Scott Welch, chief investment officer at Certuity. “We are not bearish on them, just believe diversification is a smart move right now.”
Stocks got a boost Thursday from a soft inflation report, showing that wholesale prices declined 0.5% in April from the prior month. The result follows the release of April’s consumer price index earlier this week, which grew at a 12-month rate of 2.3%, its lowest since February 2021.
Even as the temporary agreement between the U.S. and China has lifted sentiment this week, some major U.S. companies are issuing warnings about rising costs and a murky macroeconomic outlook. Walmart said on Thursday that it will likely have to raise prices on some items in late May due to tariffs.