US stocks power within 3% of their record as Wall Street closes out a
winning week
[May 17, 2025] By
STAN CHOE
NEW YORK (AP) — Wall Street cruised to the finish of its strong week on
Friday, as U.S. stocks glided closer to the all-time high they set just
a few months earlier, though it may feel like an economic era ago.
The S&P 500 rose 0.7% for a fifth straight gain and closed out its third
winning week in the last four. It’s rallied back within 3% of its record
set in February after briefly dropping roughly 20% below last month,
thanks to building hopes that President Donald Trump will lower his
tariffs against other countries after reaching trade deals with them.
The Dow Jones Industrial Average added 331 points, or 0.8%, and the
Nasdaq composite climbed 0.5%.
Trump’s trade war had sent financial markets reeling worldwide because
of twin dangers. On one hand, tariffs could slow the economy and drive
it into a recession. On the other, tariffs could push inflation higher.
This week featured some encouraging news on each of those fronts. The
United States and China announced a 90-day stand-down in most of their
punishing tariffs against each other, while a couple reports on
inflation in the United States came in better than economists expected.
It was “a week to remember,” according to economists at Bank of America
led by Claudio Irigoyen and Antonio Gabriel. But they also said they’re
not expecting a significant drop in volatility, and they’re not changing
big-picture forecasts.
“There is still huge uncertainty regarding the impact of tariffs on
economic activity and inflation,” they said in a BofA Global Research
report.
That uncertainty has been hitting U.S. households and businesses,
raising worries that they may freeze their spending and long-term plans
in response, which would hurt the economy. The latest reading in a
survey of U.S. consumers by the University of Michigan showed sentiment
soured again in May, though the pace of decline wasn’t as bad as in
prior months.
Perhaps more worryingly, expectations for coming inflation keep
building, and U.S. consumers are now bracing for 7.3% in the next 12
months, according to the University of Michigan’s preliminary survey
results. That’s up from a forecast of 6.5% a month before.
When everyone expects inflation to be high, it could kick off a vicious
cycle of behavior that only worsens inflation.
To be sure, only some of the University of Michigan’s survey responses
for the preliminary May reading came after the United States and China
announced their 90-day truce.
On Wall Street, Charter Communications rose 1.8% after it said it agreed
to merge with Cox Communications in a deal that would combine two of the
country’s largest cable companies. The resulting company will change its
name to Cox Communications and keep Charter’s headquarters in Stamford,
Connecticut.
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Specialist John McNierney, left, and trader Anthony Carannante work
on the floor of the New York Stock Exchange, Wednesday, May 14,
2025. (AP Photo/Richard Drew)
 CoreWeave jumped 22.1% after Nvidia
disclosed that it had increased its ownership stake in the company,
whose cloud platform helps customers running artificial-intelligence
workloads. Nvidia now owns 7% of CoreWeave, up from its nearly 6%
stake before CoreWeave’s initial public offering of stock in March.
Novo Nordisk’s stock that trades in the United States fell 2.7%
after the Danish company behind the Wegovy drug for weight loss said
that Lars Fruergaard Jørgensen will step down as CEO and that the
board is looking for his successor. The company cited “recent market
challenges” and how the stock has been performing recently.
All told, the S&P 500 rose 41.45 points to 5,958.38. The Dow Jones
Industrial Average climbed 331.99 to 42,654.74, and the Nasdaq
composite gained 98.78 to 19,211.10.
In the bond market, Treasury yields held relatively steady.
The yield on the 10-year Treasury edged down to 4.44% from 4.45%
late Thursday and from more than 4.50% the day before that. Lower
bond yields can encourage investors to pay higher prices for stocks
and other investments.
The two-year Treasury yield, which more closely tracks expectations
for action by the Federal Reserve, rose to 3.99% from 3.96%. It had
been as low as 3.93% earlier in the morning, before the release of
the University of Michigan’s survey.
Hope remains that this week’s better-than-expected signals on
inflation could give the Federal Reserve more leeway to cut interest
rates later this year if high tariffs drag down the U.S. economy.
In stock markets abroad, indexes rose modestly in Europe after
finishing mixed in Asia.
Tokyo’s Nikkei 225 inched down by less than 0.1% after the
government reported that Japan’s economy contracted at a faster rate
than expected in the first quarter of the year.
___
AP Writers Jiang Junzhe and Matt Ott contributed.
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