Stocks gain ground and put Wall Street on a path for all-time highs

NEW YORK (AP) — Stocks rose in morning trading Friday and put Wall Street on track to close a strong week at an all-time high. The S&P 500 rose 0.5% and is set to surpass its record reached in February. The Nasdaq composite rose 0.5% and is also on track for a record. The Dow Jones Industrial Average rose 0.9%, or 368 points, to 43,754 as of 10:55 a.m. Eastern. A record for the S&P 500 would mark a sharp turnaround from several months ago, when the key measure of Wall Street's health fell nearly 20% from the February high on fears that President Donald Trump's trade policy could harm the economy. The gains on Friday were broad, with nearly every sector within the S&P 500 rising. Nike soared 15.5% for the biggest gain on the market, despite warning of a steep hit from tariffs. The broader market has seemingly shaken off fears about the Israel-Iran war disrupting the global supply of crude oil and sending prices higher. A ceasefire between the two nations is still in place. The price of crude oil in the U.S. rose 1%, but has fallen back since last week to levels in place before the conflict began. Investors are also monitoring potential progress on trade conflicts between the U.S. and the world, specifically with China. Trump said the U.S. and China have signed a trade deal without providing details. China's Commerce Ministry also said that the two sides had "further confirmed the details of the framework" for their trade talks. But its statement did not explicitly mention an agreement to ensure U.S. access to rare earths, materials used in high-tech applications that have been at the center of negotiations. An update on inflation Friday showed prices ticked higher in May, though the rate mostly matched economists' projections. Inflation remains a big concern for businesses and consumers. Trump's on-again-off-again tariff policy has made it difficult for companies to make forecasts. It has also put more pressure on consumers worried about already stubborn inflation. A long list of businesses from carmakers to retailers have warned that higher import taxes will likely hurt their revenues and profits. The U.S. has 10% baseline tariffs on all imported goods, along with higher rates for Chinese goods and other import taxes on steel and autos. The economy and consumers have remained somewhat resilient under those tariffs, though analysts and economists expect to see the impact grow as import taxes continue to work their way through businesses to consumers. The threat of more severe tariffs continues to hang over the economy. The current pause on a round of retaliatory tariffs against a long list of nations is set to expire in July. Failure to negotiate deals or further postpone the tariffs could once again rattle investors and consumers. The Federal Reserve is monitoring the tariff situation with a big focus on inflation. The rate of inflation has been stubbornly sitting just above the central bank's target of 2%. In a report Friday, its preferred gauge, the personal consumption expenditures index, rose to 2.3% in May. That's up from 2.1% the previous month. The Fed cut interest rates twice in late 2024 following a historic series of rate hikes to cool inflation. The PCE was as high as 7.2% in 2022 while the more commonly used consumer price index hit 9.1%. The Fed has held off on rate cuts so far in 2025 over worries that tariffs could reignite inflation and hamper the economy. Economists still expect at least two rate cuts before the end of the year. Bond yields rose. The yield on the 10-year Treasury rose to 4.28% from 4.24% late Thursday. The two-year Treasury yield, which more closely tracks expectations for what the Federal Reserve will do, rose to 3.76% from 3.72% late Thursday. Stocks in Europe were mostly higher, while stocks in Asia finished mixed.