The S&P 500 ETF (SPY) and the Nasdaq 100 ETF (QQQ) closed higher on Friday to end a volatile week driven by tariff threats and a surge in precious metals.
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The markets got a boost after the University of Michigan’s Consumer Sentiment Index for January came in at 56.4, above the estimate of 54.0 and climbing from 52.9 in December. Sentiment improved broadly across several demographic groups, including age, education, income, and political affiliation. However, the index is still down by 21% compared to 71.7 a year ago. A reading above 60 signals confidence, while a reading below 60 signals pessimism.
The University of Michigan added that consumers expect year-ahead inflation of 4.0%, the lowest level since January 2025 and falling from 4.2% in the prior month. Long-run inflation expectations edged higher to 3.3% from 3.2%, with consumers worried that rising prices could bring down purchasing power.
Meanwhile, BlackRock’s (BLK) Chief Investment Officer of Global Fixed Income, Rick Rieder, has climbed the ranks of the Fed Chair race and is now a top contender to be tapped by Trump. On prediction platform Polymarket, Rieder’s odds have surged to 35% from 8% over the past week.
President Trump said earlier this week that he had narrowed down his candidates to two or three names and was impressed by Rieder following a meeting with him. “And I probably can tell you, we’re down to maybe one, in my mind,” he told CNBC.
Amid heightened geopolitical tensions, including the U.S. capture of Venezuelan President Nicolás Maduro, protests in Iran, and Trump’s threat to tariff eight European countries over control of Greenland, gold (XAUUSD) and silver (XAGUSD) have continued to surge higher. Gold has returned 15% year-to-date, while silver has more than doubled that with a 40% gain. Both precious metals have handily outperformed the S&P 500 (SPX), which is up by less than a percent over the same period.
Trump reversed his decision to tax several European nations after announcing a framework deal to acquire small pockets of land in Greenland for military use and for mineral rights. That eased global tensions, although another conflict, the Ukraine-Russia war, is still at the top of mind for many investors. The U.S. and the European Union are considering an $800 billion fund to help restore Ukraine after the war ends, according to Politico. Officials from the U.S., Ukraine, and Russia met in Abu Dhabi on Friday and will meet again tomorrow as the war nears its fourth anniversary.
The S&P 500 (SPX) closed with a 0.03% gain, while the Nasdaq 100 (NDX) returned 0.34%.