U.S. stocks closed higher Friday, with the S&P 500 and Nasdaq Composite finishing at fresh record highs as investors welcomed stronger labor market data and another round of upbeat corporate earnings despite deteriorating consumer sentiment.

The Dow Jones Industrial Average rose 12.19 points, or 0.02%, to 49,609.2. The S&P 500 gained 61.77 points, or 0.84%, to 7,398.88, while the Nasdaq surged 440.88 points, or 1.71%, to 26,247.1.

The primary catalyst for Friday’s advance was a stronger than expected April employment report that reinforced expectations for a so-called “Goldilocks” economy, resilient growth paired with moderating wage pressures. U.S. nonfarm payrolls increased by 115,000 in April, above economist forecasts, while wage growth cooled to 3.6% year-over-year and unemployment held steady at 4.3%, according to Labor Department data.

Investors interpreted the report as reducing the likelihood of a near-term economic slowdown while also easing concerns that the Federal Reserve may need to tighten policy further. Treasury yields eased during the session as markets priced in a more balanced outlook for growth and inflation. Semiconductor and AI-linked shares led gains throughout the afternoon, helping push the Nasdaq to another all-time closing high. Earlier in the session, the index briefly climbed more than 1% as enthusiasm around artificial intelligence infrastructure spending accelerated following strong corporate earnings and cloud-related announcements.

Consumer confidence, however, painted a sharply different picture of the economy. The University of Michigan’s preliminary May consumer sentiment index fell to a record low reading of 48.2 from 49.8 in April as rising gasoline prices weighed heavily on household expectations. The survey’s measure of current economic conditions dropped 9% month-over-month.

CNBC reported that surging fuel costs tied to the Iran war intensified pressure on consumers, with sentiment weakening across multiple demographic groups. Joanne Hsu, director of the University of Michigan Surveys of Consumers, said households continued to feel “buffeted by cost pressures.”

Crude oil prices remained elevated during the session. June WTI crude futures settled near $95.35 per barrel after trading in a volatile intraday range as investors monitored ongoing geopolitical risks and energy supply concerns.

Next week, attention will focus on new inflation readings, retail sales data and President Trump's trip to China for a summit with President Xi Jinping on May 14–15. They will discuss economic trade, Taiwan, and the ongoing Iran war.