S&P 500 Hits New High 6,177.14 on Trade Deal Hopes

On Friday, the S&P 500 index achieved a new all-time high, closing at 6,177.14, surpassing its previous record of 6,147.43 set in February. This achievement came amidst a backdrop of optimism surrounding trade deal negotiations and a general risk-on sentiment in the market. The Nasdaq Composite also hit a new record, while the Dow Jones Industrial Average gained but remained slightly below its own all-time high. The market's upward trajectory was fueled by hopes of a trade deal between the U.S. and China, as well as positive developments in budget negotiations in Congress.

Despite rising inflation, as indicated by the core Personal Consumption Expenditures Price Index (PCE) ticking up to 2.7% in May, investors remained undeterred. The Federal Reserve's favorite gauge of inflation did not dampen market enthusiasm, with bets on a near-term interest rate cut remaining steady. The S&P 500's rally has been particularly impressive, surging 23% from its lows in April, driven by a combination of trade deal optimism and a ceasefire in the Israel-Iran conflict. The index has now surpassed its previous resistance levels and is well above its crash levels from earlier in the year.

Analysts have pointed to the potential for the S&P 500 to reach 6,500 in the second half of the year, with UBS raising its year-end price target to 6,200. The market's momentum suggests that trade issues are no longer a significant concern for investors, with the White House finalizing its trade deal with China and promising additional trade agreements.

Meanwhile, Bitcoin remained relatively stable, trading at around $107,000 with minimal fluctuations. The cryptocurrency has been hovering within a narrow range, failing to break out of its recent ceiling despite an over 5% gain for the week. The steady performance of Bitcoin contrasts with the dynamic movements in the stock market, highlighting the differing factors influencing these asset classes.