The S&P 500 surged 0.7% on Friday, marking a powerful end to the week as investors brushed off worrisome consumer sentiment and ongoing inflationary concerns. The index climbed 5% for the week, its most robust gain since November 2023, powered by a tech stock resurgence and signs of easing trade tensions between the U.S. and China.

Other major indices followed suit. The Nasdaq Composite rose 0.5%, while the Dow Jones Industrial Average jumped 331 points, or 0.7%. Over the five-day stretch, the Nasdaq saw an impressive 6% rise, and the Dow posted a 3% gain—underscoring renewed optimism across Wall Street.

Fueling the rally was the U.S.-China agreement to pause new tariffs for 90 days, calming fears of escalating trade disputes. Tech giants were the biggest beneficiaries of the upbeat mood: Nvidia soared more than 15%, Meta gained 7%, while Apple and Microsoft also registered significant upward movement.

However, the rally lost some steam late Friday following a sharp drop in consumer sentiment. The University of Michigan’s sentiment index plummeted to 50.8—its second-lowest level on record. More concerning was the inflation outlook: short-term expectations rose to 7.8%, the highest since 1981, sparking renewed stagflation fears.

Despite these headwinds, analysts remain cautiously optimistic. “Markets are repricing the stagflation risk right now,” said Jamie Cox of Harris Financial Group. “Consumer spending remains resilient, which gives the economy some cushion.”

Adding to the uncertainty, President Donald Trump hinted that his administration would soon issue letters detailing new tariff rates, citing limited negotiation capacity. While this reignites trade concerns, investors remain focused on near-term economic indicators.

With a five-day winning streak under its belt and year-to-date losses erased, the S&P 500’s performance reflects investor confidence—albeit a fragile one. Market participants now await further trade updates and fresh inflation data to gauge the sustainability of the current rally.