Stocks on Wall Street on Friday notched modest gains, erasing some of the market’s steep losses from a day earlier.
However, the upbeat finish to a turbulent week still left the market with its third straight weekly loss.
Stocks swung between gains and losses all week as investors weighed the prospect of a prolonged trade war between the US and China.
Trading has been volatile since the dispute escalated earlier this month, with both sides raising tariffs on each other’s goods.
Financial companies on Friday led the buying, as the yield on the 10-year US Treasury note reversed part of a steep slide a day earlier. Rising yields boost interest rates on loans, which makes lending more profitable.
The modest gains snapped a two-day losing streak for the S&P 500 as investors saw opportunity after the previous days’ wave of selling.
“Today you’re just seeing a rebound, really almost across the board, so that tells you yesterday everything was just being sold with no rhyme or reason,” EventShares chief investment officer Ben Phillips said.
The S&P 500 on Friday rose 3.82 points, or 0.1 percent, to 2,826.06, but was down 1.2 percent from a close of 2,859.53 on May 17.
The Dow Jones Industrial Average on Friday gained 95.22 points, or 0.4 percent, to 25,585.69, sliding 0.7 percent from 25,764.00 a week earlier.
The NASDAQ Composite on Friday added 8.72 points, or 0.1 percent, to 7,637.01, dropping 2.3 percent from a close of 7,816.28 a week earlier.
Small company stocks fared better than the rest of the market, with the Russell 2000 on Friday climbing 12.73 points, or 0.9 percent, to 1,514.11, but still lost 1.4 percent from 1,535.76 on May 17.
The market’s modest rebound came ahead of a three-day holiday weekend. US stock markets are to be closed tomorrow in observance of Memorial Day.
The resumption of trade hostilities this month has interrupted a market rally that saw the S&P 500 recoup the fourth quarter’s sharp loss and hit a new high.
The index is down 4.1 percent so far this month, although it is still sporting a gain of 12.7 percent for the year.
The US and China concluded their 11th round of trade talks earlier this month with no agreement. Instead, the US moved to increase tariffs on Chinese goods, prompting China to reciprocate.
The trade dispute escalated further after the US proposed restrictions on technology sales to China, although it has temporarily backed off.
US President Donald Trump on Thursday said that he expects to meet with Chinese President Xi Jinping (習近平) at a summit next month in Japan.
Both sides have expressed a willingness to resume negotiations, while at the same time ratcheting up antagonistic rhetoric, leaving investors confused about what happens next.
Investors will likely be stuck dealing with a volatile market until the outcome in the trade dispute becomes clear.
As such, investors are starting to realize that the conflict could drag on much longer than initially anticipated, Personal Capital chief investment officer Craig Birk said.
“The lesson learned lately is that nobody knows,” Birk added.
Technology companies have borne the brunt of the market’s month-long downturn as they face the possibility of restricted sales to Chinese companies.
The sector on Friday eked out a tiny gain, with HP Inc rising 4.4 percent and Intuit Inc climbing 6.7 percent after reporting solid profits and issuing a surprisingly good forecast.
Financial stocks led the gainers. Capital One Financial Corp rose 1.7 percent and Bank of America Corp finished 1.5 percent higher.
Healthcare companies also notched gains. Medtronic PLC picked up 1.5 percent.
Consumer staples, which include beverage and packaged-food makers, declined the most. Constellation Brands Inc slid 3.7 percent.
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