S&P 500 Nears Another All-Time High: What's Driving The Action?

Stocks are mixed nearing midday Friday, with the major indices staying near the flatline as traders digest weaker-than-expected retail sales, potential tariffs and geopolitical developments. The S&P 500 is up 1.5% on the week and within striking distance of a new all-time high. 

What To Know: Stocks have been buoyed by the strongest corporate earnings season since 2021, with S&P 500 companies posting a 16.4% year-over-year earnings growth rate in the fourth quarter, according to FactSet. 

Tariffs: FactSet also points out that 146 S&P 500 companies have mentioned “tariffs” as a concern during earnings calls — the highest number since mid-2019. 

However, fears of broad tariffs have eased after President Donald Trump delayed their implementation on Mexico, Europe and Canada in recent days. Wall Street may be looking for negotiations in the coming weeks that could shelf most tariffs in the short term. 

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Geopolitical Tensions: Geopolitical tensions have eased somewhat as the temporary ceasefire between Israel and Hamas has held and optimism around the potential end to the war in Ukraine grows. 

Ukrainian President Volodymyr Zelenskyy told reporters at the Munich Security Conference on Friday that he is willing to participate in Trump’s peace initiative and eventual talks with Russia.

Economic Data: Wall Street climbed on Thursday, even as the Producer Price Index (PPI) sharply exceeded estimates in January. 

Markets are largely shrugging off Friday's weaker-than-expected retail sales figures which were likely affected by January's cold weather and California wildfires, as well as the upward revision of December results.

The S&P 500 index, tracked by the SPDR S&P 500 ETF Trust SPY, rose 1% on Thursday to close at 6,115.07, inches away from passing its all-time closing high of 6,118.71 set on Jan. 23, 2025. The S&P 500 has gained nearly 5% over the past month and is up 0.05% at 6,118.07 at the time of publication Friday. 

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