U.S. stocks closed higher on Friday, with major indexes posting their strongest week in months as investors brushed aside tensions between the U.S. and major allies as a meeting of leaders of the Group of Seven industrialized nations got under way in Canada.
What are markets doing?
The Dow Jones Industrial Average DJIA, +0.30% rose 75.12 points to 25,316.53, a gain of 0.3%. The average posted its third straight positive session, and closed at its highest level since March.
The S&P 500 SPX, +0.31% rose 8.66 points to 2,779.03, a gain of 0.3%. The Nasdaq Composite Index COMP, +0.14% rose 10.44 points to 7,645.51, a rise of roughly 0.1%.
For the week, the Dow advanced 2.8%, its biggest weekly gain since March. The S&P gained 1.6% and the Nasdaq rose 1.2%. Both posted their third straight weekly gain.
What is driving the market?
Trading was relatively quiet on Friday as G-7 leaders gathered in Canada for a two-day summit where trade issues will be in focus. Hostilities between U.S. President Donald Trump and leaders of two close allies—Canada and France—intensified ahead of the meeting.
The U.S. president is planning to leave the G-7 summit early, to go to Singapore ahead of his scheduled meeting there with North Korea leader Kim Jong Un on Tuesday.
Away from international relations, investors are starting to focus on central bank meetings next week. The Federal Reserve is expected to raise interest rates while European Central Bank policy makers are expected to announce the timing of a reduction of its crisis-era asset-purchase initiative.
What are strategists saying?
“I wouldn’t have been surprised to have a down day in advance of G-7, and I find it very encouraging that markets are trending higher right now, it’s a sign of resilience,” said Leo Grohowski, chief investment officer at BNY Mellon Wealth Management. “Investors have been wise to not trade on trade talk and drama; we’re in a war of words, but not a trade war. If that persists, then I’m not inclined to adjust our GDP or earnings estimates.”
Grohowski forecast a “choppier” week next week, as investors digest both the entirety of the G-7 summit and the ECB meeting.
“Monetary policy has created distortions the likes of which I haven’t seen in my 30 years of experience. As Europe gives us signs that it wants to take away the punch bowl, that will cause yields to return to normal levels, which is something that could be a headwind and which we’re going to have to pay careful attention to,” he said.
Stock movers
Broadcom Inc. AVGO, -2.54% dropped 2.5% after reporting earnings late Thursday.
DocuSign Inc. DOCU, +3.45% rallied 3.5% after the tech company’s earnings out late Thursday beat forecasts.
U.S.-listed shares of Deutsche Bank AG DBK, +0.20% DB, -2.26% fell 2.3%. Bloomberg reported that the German lender is exploring options to merge with rival Commerzbank AG CBK, -1.80%
General Electric Co. GE, +1.09% rose 1.1% after the industrial conglomerate said its quarterly dividend would remain at 12 cents a share. Investors have recently been worried that the payout could be vulnerable to another cut, after having recently been halved.
Consumer staples were by far the strongest performing sector of the day. Procter & Gamble Co. PG, +1.87% rose 1.9% while Coca-Cola Co. KO, +1.17% was up 1.2%.
What economic data was in focus?
Wholesale inventories climbed 0.1% in April, the weakest gain in six months, though it was a tick stronger than expected.
