Dow, S&P 500 soar, Nasdaq rebounds in best day since November to cap volatile week

US stocks bounced back sharply on Friday to cap a volatile week on Wall Street as the risk of a government shutdown eased while investors stayed on watch for the next move in an escalating trade war.

The S&P 500 (^GSPC) climbed more than 2.1% after the benchmark index sank on Thursday to close in correction territory. The Nasdaq Composite (^IXIC) jumped over 2.6% as tech stocks soared. The Dow Jones Industrial Average (^DJI) moved up more than 600 points, or 1.6%.

Stocks have had a rough week as uncertainty over President Donald Trump’s tariff shifts whipsawed markets and overshadowed otherwise encouraging signals about the economy. All three major gauges registered weekly losses of more than 2% after the S&P 500 (^GSPC) joined the Nasdaq Composite (^IXIC) in correction.

It took less than a month for the benchmark index to fall into correction, the fifth-fastest such move in the past 75 years, according to Ritholtz Wealth Management.

But Wall Street spirits brightened as Senate Democratic leader Chuck Schumer backed off a threat to block a funding bill aimed at averting a government shutdown at the weekend.

At the same time, gold (GC=F) broke above $3,000 an ounce for the first time amid warnings about the economic damage from Trump’s tariffs. On Thursday, Trump said he didn’t plan to “bend at all” in the escalating round of tit-for-tat tariffs with America’s biggest trading partners.

Concerns that the US economy is showing signs of strain have receded after data this week showed inflation heading in the direction desired by the Federal Reserve, which holds its policy meeting next week. But the details of that data could give policymakers pause for thought.

It’s clear, however, that consumers are feeling less and less enthused about the state of their pocketbooks. The University of Michigan’s consumer sentiment survey came in at 57.9 on Friday, well below expectations of 63.

US stocks rebounded sharply to close near the highs of the session on Friday, though all three major averages still finished the week with losses.

The S&P 500 (^GSPC) climbed more than 2% after the broad-based index sank on Thursday to close in correction territory. The Nasdaq Composite (^IXIC) had its best day since the day after the election, up 2.6% as tech stocks soared. The Dow Jones Industrial Average (^DJI) climbed more than 600 points, or 1.6%.

The risk of a government shutdown faded while investors were on alert regarding any further tariff developments from the Trump administration after this week’s market action.

Despite Friday’s rally, all three major gauges registered weekly losses of more than 2%, with the Dow suffering its worst week since 2023.