Stocks closed mostly lower on Friday with only the Dow eking out a small gain. But all of the major indexes closed higher for the week.

The S&P and Nasdaq also put in their best monthly showing since November '23, with the S&P gaining 6.2% and the Nasdaq up by 9.6%.

The expectation for new trade deals to be announced in the coming week(s), along with confirmation that the AI trade is alive and well, helped lift stocks last week.

In spite of the off and on again legal rulings on President Trump's tariffs, the most likely deals that are expected to be announced are with India, Japan and South Korea.

Although, there are still potential bumps in the road. On Friday, President Trump said that China has "violated its agreement with us." He did not specify what that will mean for future negotiations or if he will again raise tariffs on them. But it was a reminder that there will be challenges ahead.

Also on Friday, the President raised tariffs on imported steel from 25% to 50%, and will be implemented on June 4^th. This is expected to further complicate trade negotiations with the EU. Previously, the threatened 50% tariffs on the EU were suspended until July 9^th to allow more time to hammer out a deal.

As for AI ? last week's earnings from NVIDIA, which showed a quarterly EPS growth rate of 39.7% vs. this time last year, and a sales growth of 69.2%, and also showed that data center revenue was up 10% from last quarter and 73% from last year, confirmed that demand for AI continues to grow.

That was further underscored a day later when Dell reported earnings and showed a quarterly EPS growth rate of 22.0%, and a sales growth of 5.13%. Moreover, they raised their guidance for the current quarter and the full-year, citing "unprecedented demand" for AI related products.

On Friday, the Personal Consumption Expenditures (PCE) index confirmed that progress on inflation continues. The headline rate was up 0.1% m/m vs. last month's 0.0% and views for 0.1%, while the y/y rate eased to 2.1% vs. last month's 2.3% and views for 2.1%. The core rate (ex-food & energy) came in at 0.1% m/m vs. last month's 0.0% and views for 0.1%. The y/y rate ticked down to 2.5% vs. last month's 2.7% and the consensus for 2.5%.

Good news, especially in the wake of worries from the Fed that tariffs increase the risk of higher inflation.

The big economic report this week is Friday's Employment Situation report. The last couple of reports have come in better-than-expected and shows the labor market remains strong, in yet another report refuting potential recession concerns.

In the meantime, the big three indexes show that the S&P is back in positive territory for the year, while the Dow and Nasdaq are within striking distance of doing the same.

See you tomorrow,