Uncertainty remains about the US and its trade partners reaching deals that permanently lower tariffs, traders have continued to express optimism. Traders largely shrugged off preliminary data from the University of Michigan showing consumer sentiment in the U.S. has unexpectedly continued to deteriorate in the month of May. It also said it's consumer sentiment index dipped to 50.8 in May after slumping to 52.2 in April. With the unexpected decrease, the consumer sentiment index has fallen to its lowest level since hitting 50 in June 2022. The report also said year-ahead inflation expectations surged to 7.3% in May from 6.5% in April, reaching the highest level since a matching figure in November 1981.

Biotechnology stocks moved sharply higher, driving the NYSE Arca Biotechnology Index up by 2.5%. Healthcare stocks were significantly strong, as reflected by the 1.9% gain posted by the Dow Jones U.S. Healthcare Index. Utilities, housing and pharmaceutical stocks also saw notable strength on the day, moving higher along with most of the other major sectors.

Asia Pacific stocks turned in a mixed performance. China's Shanghai Composite Index fell by 0.4% and Japan's Nikkei 225 Index closed just below the unchanged line, while Australia's S&P/ASX 200 Index advanced by 0.6%. The major European markets all moved to the upside on the day while the U.K.'s FTSE 100 Index climbed by 0.6%, the French CAC 40 Index and the German DAX Index rose by 0.4% and 0.3%.

In the bond market, treasuries gave back ground after an early advance but still closed modestly higher. As a result, the yield on the benchmark ten-year notes, which moves opposite of its price, edged down 1.4 bps to 4.44%.

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