Sinéad Carew and Pranav Kashyap
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By Sinéad Carew and Pranav Kashyap
(Reuters) -Wall Street's main indexes rose on Friday for their fifth straight day, buoyed by the U.S.-China tariff truce earlier in the week even as economic survey data showed a deterioration in consumer sentiment.
The S&P 500 steadily added to gains from late morning, while investors took weak data in their stride. The University of Michigan Surveys of Consumers said its Consumer Sentiment Index slumped further in May while one-year inflation expectations surged to 7.3% from 6.5% last month.
Exchange-traded funds that track the S&P 500 and Nasdaq fell about 1% in extended trade after Moody's cut the U.S. credit rating by one notch, citing rising debt and interest payments that outpace those of similarly rated sovereigns.
The S&P 500, Nasdaq and Dow Jones Industrial Average boasted weekly gains after starting out with a steep rally on Monday, after Washington and Beijing agreed to a 90-day pause in their escalating trade war. This was days after the U.S. president and British prime minister announced a limited bilateral trade agreement.
Lindsey Bell, chief market strategist at Clearnomics, New York, said Friday's advance was a "carry on from the de-escalation in the trade conflict."
With a solid economy combined with pessimistic investors, Bell expects more volatility ahead as tariff headlines come out, and added "data could change in coming months."
"I don't think we're out of the woods yet. We're going to have to take it on a day-by-day, week-by-week basis," she said.
Paul Christopher, head of global investment strategy at Wells Fargo Investment Institute, said the market is "cautiously optimistic" about the softening stance on trade, but waiting to see where the U.S. eventually lands on tariffs.
"We haven't even begun to see what happens when those tariffs really bite, when firms have to raise their prices to consumers and consumers see fewer goods and less variety on the shelves," Christopher said.
Investors were also left waiting for clarity on U.S. tax policy as Trump's sweeping tax bill failed to clear a key procedural hurdle as hardline Republicans demanding deeper spending cuts blocked the measure in a rare political setback in Congress for Republican President Donald Trump.
The Dow Jones Industrial Average rose 331.99 points, or 0.78%, to 42,654.74, the S&P 500 gained 41.45 points, or 0.70%, to 5,958.38 and the Nasdaq Composite gained 98.78 points, or 0.52%, to 19,211.10.
For the week, the S&P 500 gained about 5.3% while the Nasdaq rose 7.2% and the Dow added 3.4%.
