With Big Tech Rising, U.S Stocks Edge Higher to Head for Weekly Gains

U.S. stocks edged upward on Friday morning, continuing a trend that has seen gains in three of the past four weeks. Investors are awaiting a key consumer sentiment report from the University of Michigan, which is set to be released later in the day. As of 9:37 a.m. in New York, the S&P 500 was up by 0.1%, marking its fifth consecutive day of gains. The Nasdaq 100 also gained 0.1%, supported by strength in tech giants like Nvidia, Apple, and Tesla. On a weekly basis, the S&P 500 has advanced 4.5%, while the Nasdaq has surged 6.4%.

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The overall mood in the market has stabilized following months of turbulence. Investors are growing more hopeful that the aggressive tariff measures pushed by President Donald Trump may end up being less damaging than originally feared. Meanwhile, a strong corporate earnings season is wrapping up, providing further confidence.

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Although major indices like the S&P 500 and Nasdaq 100 have rebounded from earlier declines and are now showing year-to-date gains, uncertainty persists regarding how the ongoing global trade tensions will ultimately affect the U.S. economy and corporate profitability.

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This uncertainty was highlighted by Applied Materials Inc., the largest U.S. supplier of chip-manufacturing tools. Its shares tumbled 5.4% after the company issued a weak forecast, suggesting that trade friction with China could be taking a toll. Take-Two Interactive Software also slipped 0.2% after the video game company’s revenue outlook for the year came in below expectations.

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Ryan Grabinski, Director of Investment Strategy at Strategas Asset Management, reflected the cautious sentiment by noting, “We’ve remained optimistic, but it’s getting harder to identify what will push the market significantly higher from here.”

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Among sectors, communication services led the way, climbing 0.8%. This was driven in part by a 1.4% rise in Charter Communications, which announced a merger with Cox Communications in a deal combining two of the largest U.S. cable operators. The cash-and-stock agreement values Cox at approximately $34.5 billion, including debt, according to a joint statement released by the companies.

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Traders and analysts are closely monitoring technical indicators for signals on whether the current rally has more room to run. The S&P 500’s 14-day relative strength index has climbed to its highest point since early December and is nearing the 70 mark—a level that many technical analysts interpret as an indication that the market may be overbought.

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Friday also marks the midpoint of the second quarter, which began with a burst of market volatility driven by global trade tensions. Early April saw a shockwave from newly imposed tariffs, followed by a momentary easing. Since then, investors have become more hopeful that a recession can be avoided, especially after the U.S. and China agreed to a temporary truce in their trade dispute.

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Nicholas Colas, co-founder of DataTrek Research, noted that the outlook remains positive. “The U.S. economy and labor markets are in relatively good shape, trade policy has stabilized again, and corporate earnings are benefiting,” he wrote. He believes the S&P 500’s strong May performance — up more than 6% — could continue through the rest of the quarter, though likely at a more modest pace.

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The S&P 500 is now just 3.7% below its all-time closing high from February. Still, despite the 90-day pause in many U.S.-China tariffs, tensions linger. It will also take time for the full economic impact of these tariffs to appear in the data.

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Meanwhile, Raphael Bostic, President of the Federal Reserve Bank of Atlanta, said he anticipates economic growth to slow in 2025, but does not foresee a recession. He reiterated his projection that the Fed may cut interest rates once in 2025.

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New investment trends have also emerged in response to trade tensions and recession fears. According to preliminary data from Bloomberg’s analysis of 13F filings, hedge funds shifted their portfolios in the first quarter, increasing their exposure to healthcare while scaling back on technology stocks.

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One healthcare stock in focus is UnitedHealth Group Inc., which rose 0.5% on Friday. The modest gain followed a rough stretch for the company. Its shares fell 11% on Thursday after the Department of Justice is investigating the company for potential criminal Medicare fraud.

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Earlier in the week, UnitedHealth shares plunged 18% after its CEO stepped down and the company suspended its 2025 outlook. The stock has now fallen for eight straight trading sessions, dropping more than 30% during that time.

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In summary, while markets are enjoying a period of relative calm and recovery, several warning signs — including ongoing trade disputes, weak forecasts from key companies, and regulatory concerns — suggest that caution remains warranted. Investors are closely watching upcoming economic data and central bank commentary for further signals on the direction of both the economy and the markets.

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