The S&P 500 on Friday notched its third straight weekly gain, even as the major US stock indices ended the day mostly lower.
A slide in technology stocks, along with losses in consumer-focused and real-estate companies, offset solid gains elsewhere in the market, including big Wall Street banks and industrial stocks.
Bond yields rose sharply after the government reported that Americans kept spending money last month, particularly on cars.
An easing of tensions in a costly trade war between the US and China bolstered the market this week, renewing hope among investors that a new round of negotiations next month might yield some progress.
Investors are now looking ahead to next week, when the US Federal Reserve is expected to announce another interest rate cut.
The central bank in July lowered its benchmark interest rate by a quarter-point, its first cut in a decade, in a bid to help maintain US economic growth.
“When you have a run like we had, the market tends to pull back,” Prudential Financial Inc chief market strategy Quincy Krosby said. “Going into the Fed meeting next week, there may be a little bit of caution.”
The S&P 500 on Friday slipped 2.18 points, or 0.1 percent, to 3,007.39. With a gain of about 1 percent from 2,978.71 a week earlier, the benchmark index moved closer to its all-time high of 3,025.86 set on July 26.
The Dow Jones Industrial Average on Friday posted its eighth straight gain, rising 37.07 points, or 0.1 percent, to 27,219.52, jumping 1.6 percent from a close of 26,797.46 on Sept. 6.
The technology-heavy NASDAQ on Friday fell 17.75 points, or 0.2 percent, to 8,176.71, an increase of 0.9 percent from 8,103.07 a week earlier.
The Russell 2000 index of smaller-company stocks on Friday gained 3.07 points, or 0.2 percent, to 1,578.14, surging 4.9 percent from a close of 1,505.17 on Sept. 6.
The smaller, US-focused companies in the Russell are seen as more insulated from the volatile swings in the US-China trade war.
Investors’ renewed optimism on trade marked a stark contrast to the whole of last month, when the US and China made increasingly damaging retaliatory moves to escalate the dispute that has threatened to slow global economic growth and potentially prompt a recession.
“The palpable fear in the market during August has eased as the trade headlines have eased,” Krosby said. “But we also saw stimulus from the European Central Bank. The market applauded that and expects the Fed to cut rates.”
Central banks around the globe are trying to invigorate their economies at a time when growth is slowing.
On Thursday, the European Central Bank delivered a blast of monetary stimulus to try to rescue Europe’s teetering economy in the face of sputtering growth and uncertainties caused by the US-China trade conflict and Britain’s expected exit from the EU.
The US economy looks far sturdier than Europe’s and the Fed’s action is seen as a pre-emptive bid to help sustain a decade-long expansion.
Still, economic data has been mixed.
On Friday, the US Department of Commerce’s retail sales report beat economists’ forecasts, but showed that consumers are becoming more cautious.
The increase came from auto sales. Without those sales, spending was flat for the first time since February.
A steady rise in bond yields propelled bank stocks higher this week.
The yield on the 10-year US Treasury note is up more than 30 basis points from 1.55 percent late last week as investors grow more confident about economic growth amid easing trade war tensions.