Wall Street closed sharply higher on Friday, capping a roller-coaster week, after the White House hinted it was open to reaching a trade agreement with China.
A wave of renewed optimism sent the major indexes soaring, providing some relief after days of intense volatility.
The S&P 500 jumped 1.8%, while the Dow Jones Industrial Average climbed 658 points, or 1.7%.
The tech-heavy Nasdaq Composite surged 2%, leading gains as investors rushed back into riskier assets.
Markets gained momentum in the afternoon following comments from the White House suggesting President Donald Trump was “optimistic” about China seeking a deal with the United States.
The upbeat sentiment helped investors shake off concerns that had rattled markets earlier in the week.
This week marked one of the most turbulent periods for US stocks in recent history.
On Thursday, major averages plummeted as fears over escalating trade tensions pushed traders into a risk-off mode.
The S&P 500 sank 3.46%, the Dow Jones dropped by 1,014 points, or 2.5%, and the Nasdaq tumbled 4.31%.
The sell-off came just a day after a historic rally on Wednesday, when Trump announced a 90-day pause on certain tariffs.
That announcement triggered a powerful rebound: the S&P 500 soared 9.52%, marking its third-largest one-day gain since World War II, while the Dow exploded higher by more than 2,900 points.
Volatility remained a major theme throughout the week.
The CBOE Volatility Index (VIX), Wall Street’s fear gauge, spiked above 50 earlier before easing slightly to hover near 44 by Friday.
Such elevated levels of volatility typically reflect deep investor uncertainty about economic and policy risks.
Trade policy remained the dominant market driver.
While Trump’s softer tone on tariffs sparked optimism, investors remain cautious about the long-term outlook for US-China relations.
Many market participants fear that further escalations or policy shifts could trigger another bout of selling.
Aside from trade news, economic data and corporate earnings updates also played a role in driving sentiment.
However, trade developments largely overshadowed other indicators, reinforcing just how sensitive markets have become to geopolitical headlines.
Looking ahead, analysts warn that while Friday’s rally is encouraging, volatility may persist as investors continue to weigh mixed signals on the trade front.
The strong end to the week helped major indexes recover some of their earlier losses, but all three remained down for the month.
Traders and investors alike are bracing for more headline-driven moves in the coming weeks as negotiations between Washington and Beijing evolve.
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