Wall Street drifts back within 4% of its record after the S&P 500 notches a 4th straight gain

NEW YORK (AP) — Most U.S. stocks drifted higher in quiet trading Thursday following a jumble of mixedreports that offered little clarity on how the U.S. economy is managing through President Donald Trump’s trade war.

The S&P 500 rose 0.4%, enough to extend its winning streak to a fourth day and to pull within 3.7% of its all-time high set earlier this year. The Dow Jones Industrial Average added 271 points, or 0.6%, and the Nasdaq composite slipped 0.2%.

Stocks got a lift from easing Treasury yields in the bond market. They fell after the economic reports suggested the Federal Reserve may have more room to cut interest rates later this year to bolster the U.S. economy if it weakens under the weight of high tariffs.

But the reports did little to spell out whether the economy is falling toward a recession, as many investors had been fearing, or shaking off the uncertainty after Trump called off many of his tariffs temporarily. The headliner reports said shoppers spent less at U.S. retailers last month than expected, while inflation was better at the wholesale level than economists forecast. Other updates said U.S. manufacturing looks like it’s still contracting but fewer U.S. workers are applying for unemployment benefits than expected.

Even though China and the United States recently agreed on a 90-day stand-down for many of their tariffs, “the trade story isn’t over, and it’s still going to take time for tariffs to make themselves felt in economic data,” according to Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management.

Such uncertainty showed itself in Walmart’s stock, which slipped 0.5% even though it reported a bigger profit for the latest quarter than analysts expected.

Like other U.S. companies struggling through Trump’s on-again-off-again rollout of tariffs, Walmart said it decided not to offer a forecast for how much profit it will make in the current quarter.

Chief Financial Officer John David Rainey pointed to “the range of near-term outcomes being exceedingly wide and difficult to predict,” though the company did say it expects sales to grow between 3.5% and 4.5%, not including the swings that shifting values of foreign currencies can bring.

The nation’s largest retailer also said that it must raise prices due to higher costs caused by Trump’s tariffs.

Equipment maker Deere said it’s seeing “near-term market challenges” and called the situation “dynamic,” as many other companies have. It lowered the bottom end of its forecasted range of profit for the full year. But Deere's stock nevertheless rose 3.8% after it reported a stronger profit for the latest quarter than analysts expected.

Cisco Systems was another winner and rose 4.8% after the tech giant likewise topped expectations for profit. Analysts said they’re optimistic about Cisco’s artificial-intelligence prospects.

Elsewhere on Wall Street, Dick’s Sporting Goods tumbled 14.6% after it said it would buy the struggling Foot Locker chain for $2.4 billion. Dick’s also said that it made a better profit for the latest quarter than analysts expected.

Foot Locker soared 85.7% after coming into the day with a loss of nearly 41% for the year so far.

All told, the S&P 500 rose 24.35 points to 5,916.93. The Dow Jones Industrial Average added 271.69 to 42,322.75, and the Nasdaq composite fell 34.49 to 19,112.32.

In the oil market, crude prices sank roughly 2% on expectations that more petroleum could be set to flow into global markets because of a possible deal between the United States and Iran over that country’s nuclear program. Such a deal could help ease sanctions against Iran, which is a major producer of oil.

Elsewhere, China moved to reverse some of its “non-tariff” measures against the U.S. as agreed with Washington in their temporary trade war truce, while demanding that the U.S. side “immediately correct its wrong practices.”

A Chinese Commerce Ministry spokesperson accused the Trump administration of violating world trade rules by announcing that use of Ascend computer chips made by China’s Huawei Technologies violates U.S. export controls.

Stock indexes fell 0.8% in Hong Kong and 0.7% in Shanghai, while indexes were mixed elsewhere in Asia and Europe.

In the bond market, the yield on the 10-year Treasury fell to 4.44% from 4.53% late Wednesday. Falling bond yields can encourage investors to pay higher prices for stocks and other investments.

The two-year Treasury yield, which more closely tracks expectations for Fed action, dropped to 3.96% from 4.05% as traders built bets that the Fed will resume cutting its main interest rate as soon as September.

The Fed has been keeping its main interest rate on hold this year as it waits to see how Trump’s trade policies play out for the economy. Cutting rates would juice the economy by making it easier for U.S. households and companies to borrow and spend. But it would also push upward on inflation when worries are high that Trump’s tariffs will do the same thing.

Fed Chair Jerome Powell warned in a speech on Thursday that the world “may be entering a period of more frequent, and potentially more persistent, supply shocks” that could goose inflation higher and present a “difficult challenge for the economy and for central banks.”

AP Business Writers Matt Ott and Elaine Kurtenbach contributed.

Traders Jonathan Mueller, right, and Michael Capolino work on the floor of the New York Stock Exchange, Wednesday, May 14, 2025. (AP Photo/Richard Drew)

Trader Jonathan Corpina works on the floor of the New York Stock Exchange, Wednesday, May 14, 2025. (AP Photo/Richard Drew)

Trader Edward Curran works on the floor of the New York Stock Exchange, Wednesday, May 14, 2025. (AP Photo/Richard Drew)

Currency traders watch monitors near a screen showing the Korea Composite Stock Price Index (KOSPI) and the foreign exchange rate between U.S. dollar and South Korean won, top right, at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Thursday, May 15, 2025. (AP Photo/Ahn Young-joon)

Trader William Lawrence works on the floor of the New York Stock Exchange, Wednesday, May 14, 2025. (AP Photo/Richard Drew)

Currency traders watch monitors near a screen showing the Korea Composite Stock Price Index (KOSPI), top left, and the foreign exchange rate between U.S. dollar and South Korean won, top center, at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Thursday, May 15, 2025. (AP Photo/Ahn Young-joon)

Currency traders watch monitors near a screen showing the Korea Composite Stock Price Index (KOSPI) in Seoul, South Korea, Thursday, May 15, 2025. (AP Photo/Ahn Young-joon)

Iran eased some restrictions on its people and, for the first time in days, allowed them to make phone calls abroad via their mobile phones on Tuesday. It did not ease restrictions on the internet or permit texting services to be restored as the death toll from days of bloody protests against the state rose to at least 2,000 people, according to activists.

Although Iranians were able to call abroad, people outside the country could not call them, several people in the capital told The Associated Press.

The witnesses, who spoke on condition of anonymity for fear of reprisal, said SMS text messaging still was down and internet users inside Iran could not access anything abroad, although there were local connections to government-approved websites.

It was unclear if restrictions would ease further after authorities cut off all communications inside the country and to the outside world late Thursday.

Here is the latest:

The U.S.-based Human Rights Activists News Agency, which has been accurate in previous unrest in recent years, gave the latest death toll on Tuesday.

It said 1,847 of the dead were protesters and 135 were government-affiliated.

This came a day after the European Parliament announced it would ban Iranian diplomats and representatives.

“Iran does not seek enmity with the EU, but will reciprocate any restriction,” Foreign Minister Abbas Araghchi wrote on X on Tuesday.

He also criticized the European Parliament for not taking any significant action against Israel for the more than two-year war in Gaza that has killed more than 71,400 Palestinians, while banning Iranian diplomats after just “a few days of violent riots.”

Dutch Foreign Minister David van Weel said he summoned Iran’s ambassador to the Netherlands “to formally protest the excessive violence against peaceful protesters, large-scale arbitrary arrests, and internet shutdowns, calling for immediate restoration of internet access inside the Islamic Republic.

In a post on X, Weel also said the Dutch government supports EU sanctions against “human rights violators in Iran.”

The United Nations human rights chief is calling on Iranian authorities to immediately halt violence and repression against peaceful protesters, citing reports of hundreds killed and thousands arrested in a wave of demonstrations in recent weeks.

“The killing of peaceful demonstrators must stop, and the labelling of protesters as ‘terrorists’ to justify violence against them is unacceptable,” U.N. High Commissioner for Human Rights Volker Türk said in a statement Tuesday.

Alluding to a wave of protests in Iran in 2022, Türk said demonstrators have sought “fundamental changes” to governance in the country, “and once again, the authorities’ reaction is to inflict brutal force to repress legitimate demands for change.”

“This cycle of horrific violence cannot continue,” he added.

It was also “extremely worrying” to hear some public statements from judicial officials mentioning the prospect of the use of the death penalty against protesters through expedited judicial proceedings, Türk said.

“Iranians have the right to demonstrate peacefully. Their grievances need to be heard and addressed, and not instrumentalized by anyone,” Türk said.

Finland’s foreign minister says she is summoning the Iranian ambassador after authorities in Tehran restricted internet access.

“Iran’s regime has shut down the internet to be able to kill and oppress in silence," Elina Valtonen wrote in a social media post Tuesday, adding, “this will not be tolerated. We stand with the people of Iran — women and men alike.”

Finland is “exploring measures to help restore freedom to the Iranian people” together with the European Union, Valtonen said.

Separately, Finnish police said they believe at least two people entered the courtyard of the Iranian embassy in Helsinki without permission Monday afternoon and tore down the Iranian flag. The embassy’s outer wall was also daubed with paint.

Iranian security forces arrested what a state television report described as terrorist groups linked to Israel in the southeastern city of Zahedan.

The report, without providing additional details, said the group entered through Iran’s eastern borders and carried U.S.-made guns and explosives that the group had planned to use in assassinations and acts of sabotage.

The Israeli military did not immediately comment on the allegations.

The Nobel Peace Prize laureate hailed people who have “long warned about this repression, at great personal risk.”

“The protests in Iran cannot be separated from the long-standing, state-imposed restrictions on girls’ and women’s autonomy, in all aspects of public life including education. Iranian girls, like girls everywhere, demand a life with dignity,” Yousafzai wrote on X.

“(Iran’s) future must be driven by the Iranian people, and include the leadership of Iranian women and girls — not external forces or oppressive regimes,” she added.

Yousafzai was awarded the peace prize in 2014 at the age of 17 for her fight for girls’ education in her home country, Pakistan. She is the youngest Nobel laureate.

The French Foreign Ministry said it has “reconfigured” its embassy in Tehran after reports that the facility's nonessential staff left Iran earlier this week.

The embassy's nonessential staff left the country Sunday and Monday, French news agency Agence France-Presse reported.

The ambassador remained on site and the embassy continued to function, the ministry said late Monday night.

Associated Press writer Angela Charlton contributed from Paris.

German Chancellor Friedrich Merz said he believes the Iranian government is in its “final days and weeks,” as he renewed a call for Iranian authorities to end violence against demonstrators immediately.

“If a regime can only keep itself in power by force, then it’s effectively at the end,” Merz said Tuesday during a visit to Bengaluru, India. “I believe we are now seeing the final days and weeks of this regime. In any case, it has no legitimacy through elections in the population. The population is now rising up against this regime.”

Merz said he hoped there is “a possibility to end this conflict peacefully," adding that Germany is in close contact with the U.S. and European governments.

The Israeli military said it continues to be “on alert for surprise scenarios” due to the ongoing protests in Iran, but has not made any changes to guidelines for civilians, as it does prior to a concrete threat.

“The protests in Iran are an internal matter,” Israeli military spokesperson Brig. Gen. Effie Defrin wrote on X.

Israel attacked Iran’s nuclear program over the summer, resulting in a 12-day war that killed nearly 1,200 Iranians and almost 30 Israelis. Over the past week, Iran has threatened to attack Israel if Israel or the U.S. attacks.

Mobile phones in Iran were able to call abroad Tuesday after a crackdown on nationwide protests in which the internet and international calls were cut. Several people in Tehran were able to call The Associated Press.

The AP bureau in Dubai, United Arab Emirates, was unable to call those numbers back.

Witnesses said the internet remained cut off from the outside world. Iran cut off the internet and calls on Thursday as protests intensified.

This frame grab from videos taken between Jan. 9 and Jan. 11, 2026, and circulating on social media purportedly shows images from a morgue with dozens of bodies and mourners after crackdownon the outskirts of Iran's capital, in Kahrizak, Tehran Province. (UGC via AP)

This frame grab from videos taken between Jan. 9 and Jan. 11, 2026, and circulating on social media purportedly shows images from a morgue with dozens of bodies and mourners after crackdown on the outskirts of Iran's capital, in Kahrizak, Tehran Province. (UGC via AP)

This frame grab from videos taken between Jan. 9 and Jan. 11, 2026, and circulating on social media purportedly shows images from a morgue with dozens of bodies and mourners after crackdown on the outskirts of Iran's capital, in Kahrizak, Tehran Province. (UGC via AP)

Protesters hold up placards and flags as they demonstrate outside the Iranian Embassy in London, Monday, Jan. 12, 2026. (AP Photo/Alastair Grant)

Shiite Muslims hold placards and chant slogans during a protest against the U.S. and show solidarity with Iran in Lahore, Pakistan, Sunday, Jan. 11, 2026. (AP Photo/K.M. Chaudary)

Activists carrying a photograph of Reza Pahlavi take part in a rally supporting protesters in Iran at Lafayette Park, across from the White House, in Washington, Sunday, Jan. 11, 2026. (AP Photo/Jose Luis Magana)

Protesters burn the Iranian national flag during a rally in support of the nationwide mass demonstrations in Iran against the government in Paris, Sunday, Jan. 11, 2026. (AP Photo/Michel Euler)

People attend a rally in Frankfurt, Germany, Monday, Jan. 12, 2026. (Boris Roessler/dpa via AP)

A picture of Ayatollah Ali Khamenei is set alight by protesters outside the Iranian Embassy in London, Monday, Jan. 12, 2026. (AP Photo/Alastair Grant)