Stocks closed higher on Friday with all of the major indexes in the green for the week.

After last weekend's U.S./China trade agreement, which dramatically slashed tariffs on both countries for 90 days, and paved the way for further talks in the coming weeks, stocks gapped open higher on Monday and pretty much never looked back.

In fact, the S&P was up every single day last week, extending their winning streak to day 5. This comes on the heels of a 9-day winning streak (which was the longest winning streak in 20 years), that ended just the other week. Between when the first streak began and last Friday, the S&P has been up in 16 out of the last 19 trading days. Wow!

The U.S./China trade agreement follows the previous week's trade agreement with the U.K. And expectations are for more trade deals to be announced in the coming weeks.

The market was also helped after last week's Consumer Price Index (CPI ? retail inflation) and Producer Price Index (PPI ? wholesale inflation), both showed inflation easing.

In other news, last Friday's Consumer Sentiment Index declined to 50.8 vs. last month's report of 52.2 and views for 53.0. The year-ahead inflation expectations (also part of that report) came in at 7.3% vs. last month's 6.5% and estimates for 6.6%.

We've got a normal docket of economic reports on tap for this week.

We'll also see how the market reacts to Friday's announcement that Moody's cut their credit rating on the U.S. to Aa1 (their second highest credit rating, down from their highest Aaa rating). This also brings them into alignment with the two other large credit rating agencies, Standard & Poor's, which lowered their rating from AAA to AA+ back in 2011 (their second highest rating), and Fitch Ratings, which lowered theirs to AA+ from AAA in 2023 (their second highest rating as well).

Moody's cited rising government debt and increasing interest payments on the debt. Why the different agencies waited so long to arrive at the same place (14 years vs. Standard & Poor's and nearly 2 years vs. Fitch) is peculiar.

Nonetheless, it will put more focus on the recent debate on the Administration's "big beautiful bill," which tackles many top priorities of the White House, including renewing the 2017 tax cuts (and then some), which expires at the end of the year.

The bill failed to advance out of the House Budget Committee last Friday. It will likely be teed up again for another vote later this week after more work is done on it.

You can also expect another debate to take place in the coming days and weeks, and that's on pass-through price increases due to increased tariffs. Walmart last week said they expect to increase some prices on some goods due to tariffs. And we'll see what other retailers plan to follow suit and by how much.

In the meantime, the big 3 indexes are approaching their all-time high closes. The Dow, which is back in the plus column for the year, is only -5.24% away from their all-time high close; the S&P is also back in the green for the year, and is only -3.02% away from their all-time high close; and the Nasdaq is just -0.52% away from getting into positive territory for the year, and is only -4.77% away from their all-time high close.

What a difference a handful of weeks can make.

See you tomorrow,