US stocks ended the week higher, with the S&P 500 marking its second straight weekly gain and the Nasdaq jumping 3.4% on strong tech earnings. Optimism was boosted by easing trade tensions as President Trump reduced auto tariffs and officials hinted at a nearing trade deal. While job openings fell and private payroll growth slowed, Friday’s jobs report beat expectations, helping lift markets. The US economy contracted 0.3% in Q1, its first decline in 3 years, due to higher imports and weaker consumer and government spending. However, inflation remained flat and consumer spending rose, suggesting resilience. Treasury yields rose after the jobs data, while municipal bonds rallied and high yield bonds saw support despite energy sector pressure.
European stocks rose, with the STOXX Europe 600 up 3.4% as trade tensions eased. Eurozone GDP grew 0.4% in Q1, beating forecasts, with strong gains in Spain and Italy. Inflation stayed high, and core inflation rose to 2.7%. Still, economic confidence weakened after new US tariffs, and consumer sentiment remained negative. In the UK, house prices fell and mortgage approvals declined for a third month. Business confidence also dropped due to tariff worries and higher labor costs.
