05:03 PM EDT, 05/16/2025 (MT Newswires) -- Stocks on Wall Street advanced Friday, with the S&P 500 rising for the fifth straight session during a week that saw trade tensions ease between the US and China.

The Dow Jones Industrial Average closed 0.8% higher at 42,654.7, while the S&P 500 rose 0.7% to 5,958.4. The Nasdaq Composite climbed 0.5% to 19,211.1. Barring energy, all sectors ended in the green with health care leading gainers.

The Nasdaq rallied 7.2% on the week. The S&P 500 and the Dow posted weekly gains of 5.3% and 3.4%, respectively.

"Investors breathed a sigh of relief this week as the US and China announced a major truce in their trade war following marathon weekend talks in Geneva," Scott Anderson, chief US economist at BMO, said in a Friday note. "The economy isn't completely out of the woods, yet. Stagflationary risks remain high and considerable damage has already been done."

Washington and Beijing recently agreed to suspend most duties on each other's goods for 90 days. Previously, the Trump administration reached a trade agreement with the UK.

In economic news, US housing starts rose last month as a double-digit percentage gain in multi-family projects helped offset a decline in the single-family component, government data showed.

In the coming quarters, housing starts are expected to drop below 1.3 million units amid factors such as higher building costs due to tariffs, Oxford Economics said. "The risk to our forecast is tilted to the upside if the (US') recent truce on tariffs with China becomes permanent or if tariffs are scaled back further," the firm wrote.

Consumer sentiment unexpectedly deteriorated in May, hitting the lowest reading in nearly three years, as inflation expectations mounted, according to a survey by the University of Michigan.

"Many survey measures showed some signs of improvement following the temporary reduction of China tariffs, but these initial upticks were too small to alter the overall picture -- consumers continue to express somber views about the economy," said Joanne Hsu, Surveys of Consumers director.

US Treasury yields were higher, with the 10-year rate rising one basis point to 4.45% and the two-year rate gaining two basis points to 4.00%.

West Texas Intermediate crude oil was up 1.2% at $62.35 a barrel.

In company news, 3M ( MMM ) shares climbed 2.9%, the second-best performer on the Dow, as JPMorgan and Mizuho raised their respective price targets on the industrial conglomerate's stock.

Charter Communications ( CHTR ) and Cox Communications agreed to combine in a deal that would better position the combined entity to compete with broadband and streaming companies. Charter Communications ( CHTR ) shares rose 1.8%.

Applied Materials ( AMAT ) was the worst performer on the S&P 500, down 5.3%. The semiconductor equipment maker late Thursday logged fiscal second-quarter revenue that trailed Wall Street's estimates.

Caterpillar ( CAT ) gained 1.1%. UBS upgraded its rating on the heavy equipment manufacturer's stock to neutral from sell and raised its price target to $357 from $272, saying the company's earnings prospects have improved following a recent de-escalation of tensions between the US and its trading partners.

Gold fell 0.8% to $3,201.90 per troy ounce, while silver lost 0.7% to $32.44 per ounce.