The S&P 500 advanced for a fourth consecutive session, contributing to this week’s rally following the agreement between the U.S. and China to temporarily reduce tariff rates. Treasury yields declined, offering support to stocks. The broad market index experienced an increase of 0.41%, concluding at 5,916.93. Meanwhile, the Dow Jones Industrial Average saw a gain of 271.69 points, equivalent to 0.65%, closing at 42,322.75. The Nasdaq Composite exhibited a lackluster performance, declining by 0.18% to close at 19,112.32.

Confidence in the immediate outlook for stocks has bolstered following last weekend’s discussions between Treasury Secretary Scott Bessent and Chinese officials, which seemed to prevent a short-term downturn in economic activity and an escalation in inflation. Tech giants are demonstrating robust performance week to date. Nvidia and Tesla have both experienced an increase of approximately 15%, whereas Meta Platforms has seen a rise of nearly 9% during the same timeframe. Amazon and Alphabet have experienced increases of over 6% and 7%, respectively. The Nasdaq Composite has increased by 6.6% this week, followed by the S&P 500, which is up 4.5%, and the Dow, which has risen by 2.6%.

“This is a market that has shifted to cautious optimism, i.e., market sentiment has shifted toward measured optimism, as recession fears begin to recede and equity markets demonstrate underlying strength.” “However, a number of macro and micro risks continue to form a ‘wall of worry’ that investors must navigate,” said Joe Cusick, senior vice president and portfolio specialist at Calamos Investments. “The next phase will hinge on whether the current rally can broaden and sustain through the summer months, or whether it gives way to a healthy consolidation or correction.”

Foot Locker’s shares experienced a remarkable increase of nearly 86% following the announcement from Dick’s Sporting Goods regarding its intention to acquire the retailer for $2.4 billion. UnitedHealth experienced a decline of nearly 11% following a report from The Wall Street Journal, which cited sources familiar with the matter, indicating that the Justice Department is investigating the insurer. A spokesman for UnitedHealth subsequently informed CNBC that the insurer has not received any notification from the DOJ regarding the “supposed” investigation that was reported.

On Thursday, traders evaluated the economic landscape, noting an unforeseen drop in wholesale prices from the previous month. The Bureau of Labor Statistics reported that the producer price index for April experienced a decline of 0.5% month over month. According to a survey conducted by Dow Jones, economists anticipate that the Producer Price Index (PPI) will rise by 0.3% for the month. In April, retail sales saw a modest increase of 0.1%, aligning with consensus estimates. Conversely, industrial production figures for the same month experienced a decline that exceeded expectations.

Following the publication of the subdued inflation report, bond yields experienced a decline. The 10-year Treasury yield decreased by over 8 basis points to 4.44%, whereas the rate on the 2-year note fell by 9 basis points to 3.96%.