Wall Street advanced on Friday, notching weekly gains as investors parsed a spate of earnings and looked for signs of easing tensions in the U.S.-China trade dispute. Canada’s main stock index edged lower but still posted a weekly gain.
The S&P 500 and the Nasdaq were bolstered by gains in the “magnificent seven” group of artificial intelligence-related megacaps, while the blue-chip Dow was more muted.
The small cap Russell 2000 enjoyed its largest weekly percentage gain since November.
Beijing exempted some U.S. imports from its 125% tariffs but denied Trump’s negotiation claims, on the heels of recent de-escalatory statements from Treasury Secretary Scott Bessent, in the latest sign that the world’s two largest economies are dialing back their trade war tensions, which have rattled markets for weeks.
“We’re looking at a nice finish to what was a pretty strong week,” said Greg Bassuk, CEO at AXS Investments in New York. “The week kicked off with a strong sell sentiment but a real robust rebound followed. It’s been a pretty strong week and it’s largely been sparked by a sense of de-escalation of both the trade war with China.”
First-quarter earnings season has hit full-stride, with 179 of the companies in the S&P 500 having reported. Of those, 73% have beaten expectations, according to LSEG.
Analysts now see aggregate S&P 500 earnings for the January to March period of 9.7% year-on-year, sunnier than the 8.0% estimate as it stood on April 1, per LSEG.
But investors are largely looking past results and parsing forward guidance, particularly lowered or pulled projections due to economic uncertainties and dampening consumer spending.
The University of Michigan released its final take on April consumer sentiment, and while the index was upwardly revised, it was still at the lowest level since July 2022 and inflation expectations remained hot.
The Dow Jones Industrial Average rose 20.10 points, or 0.05%, to 40,113.50, the S&P 500 gained 40.44 points, or 0.74%, to 5,525.21 and the Nasdaq Composite gained 216.90 points, or 1.26%, to 17,382.94.
The Toronto Stock Exchange’s S&P/TSX Composite Index ended down 17.02 points, or 0.1%, at 24,710.51, after posting a three-week high on Thursday.
For the week, the index was up 2.1%, its third straight weekly advance.
“The TSX has been walking on a tight rope - balancing domestic political uncertainty against potential spillover from global economic shifts,” said Victor Kuntzevitsky, a portfolio manager at Stonehaven, Wellington-Altus Private Counsel.
Canada stands to elect a government that will push policies to boost business more than in recent years but its trade-dependent economy could be in line for an increased level of deficit spending, analysts and investors said before Monday’s vote.
Prime Minister Mark Carney’s ruling Liberal Party remains ahead in the latest polls but the gap with the main opposition Conservative Party, led by Pierre Poilievre, is tightening.
The materials sector, which includes metal mining shares, has been the strongest performing sector on the TSX this year, advancing more than 20%, as safe-haven demand propelled the price of gold to a record high.
“We have been lightening up on the materials space and using that to buy technology-heavy indices elsewhere,” Kuntzevitsky said, adding that he could raise his energy share holdings if a potential election win for the Liberals, who are seen more receptive to climate policies than the Conservatives, leads to those stocks becoming cheaper.
The industrials sector fell 1.1% on Friday, with shares of professional services firm WSP Global Inc down 4.3%.
Declines for gold and copper prices weighed on the TSX materials sector, which ended 0.7% lower.
Of the 11 major sectors in the S&P 500, consumer discretionary and tech led the gainers, while materials suffered the largest percentage loss.
Alphabet shares advanced 1.7% after the Google parent posted a 28% jump in Google Cloud revenue and assured investors that its AI investments are paying off.
Intel provided weak revenue and profit forecasts, sending the chipmaker’s stock down 6.7%.
Shares of oilfield services provider SLB dipped 1.2% after the company missed first-quarter profit estimates and warned of a potential industry-wide shift due to economic uncertainty and tariff risks.
Charter Communications jumped 11.4% after the broadband and cable company beat revenue estimates and added more subscribers than expected.
Advancing issues outnumbered decliners by a 1.33-to-1 ratio on the NYSE. There were 54 new highs and 27 new lows on the NYSE.
On the Nasdaq, 2,317 stocks rose and 2,024 fell as advancing issues outnumbered decliners by a 1.14-to-1 ratio.
The S&P 500 posted 4 new 52-week highs and 6 new lows while the Nasdaq Composite recorded 32 new highs and 47 new lows.
Volume on U.S. exchanges was 14.30 billion shares, compared with the 19.13 billion average for the full session over the last 20 trading days.
Reuters, Globe staff