Volkswacht Bodensee - US stocks back at records on US-China trade progress

Both the S&P 500 and Nasdaq finished at all-time highs following a roller-coaster session that included a stint in negative territory after Trump announced he was breaking off trade talks with Canada, rupturing a series of largely positive headlines on trade.

Earlier, European stock markets also rose, with the Paris CAC 40 leading the way, boosted by a rise in luxury stocks.

The records reflect improved sentiment, with the Iran-Israel ceasefire adding to positive movement on trade compared with the spring.

"There is hope in the market, there may be some over-optimism around some things," said Jason Schenker of Prestige Economics. "But there was a lot of optimism."

Friday's session was not without volatility. US stocks opened higher and were solidly positive through early afternoon when Trump blasted Canada's digital services tax in a social media post that called the country "very difficult" to trade with.

But after slipping into the red, both the S&P 500 and Nasdaq returned to positive territory, finishing with gains for both indices and ending at records.

Tom Cahill, chief investment officer at Ventura Wealth Management said other trade news developments in recent days had been positive, including Washington and Beijing's confirmation on finalizing a framework to move forward on trade.

"The news has been incrementally more positive since April on the trade front," Cahill said.

The S&P 500 last hit a record in February, but began to come under pressure thereafter as Trump began to sharpen his rhetoric on trade. This culminated with Trump's April 2 "Liberation Day" vow to implement steep new levies on trading partners.

Trump has since suspended the most onerous elements of his trade overhaul, while still implementing the biggest US tariffs imposed in decades.

That has raised concerns about inflation. The personal consumption expenditures price index climbed 2.3 percent last month from a year ago, according to data released Friday.

This was in line with analyst expectations and a slight acceleration from April's 2.2 percent increase.

But Cahill said the tariffs have thus far not resulted in significant inflationary pressures, raising hopes about Federal Reserve easing.

"Now the market is starting to anticipate a Fed rate cut in September," said Cahill, who also pointed to a boom in artificial intelligence investment as a driver of equity market momentum.

"Overall the backdrop is supportive of equity prices and I think they will drift higher," Cahill said.

- Key figures at around 2050 GMT -

New York - Dow: UP 1.0 percent at 43,819.27 (close)

New York - S&P 500: UP 0.5 percent at 6,173.07 (close)

New York - Nasdaq Composite: UP 0.5 percent at 20,273.46 (close)

London - FTSE 100: UP 0.7 percent at 8,798.91 (close)

Paris - CAC 40: UP 1.8 percent at 7,691.55 (close)

Frankfurt - DAX: UP 1.6 percent at 24,033.22 (close)

Tokyo - Nikkei 225: UP 1.4 percent at 40,150.79 (close)

Hong Kong - Hang Seng Index: DOWN 0.2 percent at 24,284.15 (close)

Shanghai - Composite: DOWN 0.7 percent at 3,424.23 (close)

Euro/dollar: UP at $1.1718 from $1.1701 on Thursday

Pound/dollar: DOWN at $1.3715 from $1.3728

Dollar/yen: UP at 144.68 yen from 144.42 yen

Euro/pound: UP at 85.43 pence from 85.22 pence

West Texas Intermediate: UP 0.4 percent at $65.52 per barrel

Brent North Sea Crude: UP 0.1 percent at $67.77 per barrel

burs-jmb/acb

D.Schaer--VB