The S&P 500 was 0.9% higher in afternoon trading, on track for its third straight gain. It’s also on pace to close out its best week since July, following a weekslong run of mostly shaky trading amid worries about the inability of Congress to support the economy and concerns that stock prices simply got too high during the summer.
The Dow Jones Industrial Average was up 180 points, or 0.6%, at 28,606, as of 12:48 p.m. Eastern time, and the Nasdaq composite was 0.6% higher.
Despite the market’s early gains, trading underneath the surface continued to be unsettled. Airline stocks climbed at the start of trading, only to drop quickly and then rise again. United Airlines rose 1.2%, American Airlines gained 1.5% and Delta Air Lines rose 1%.
Meanwhile, energy stocks went from helping to lead the market early on to slumping to the sharpest loss among the 11 sectors that make up the S&P 500.
Much of this week’s focus has been on Washington, where President Donald Trump sent markets on a sudden skid Tuesday after he halted negotiations on a support package for the economy until after the election. Investors have been clamoring for such aid since the expiration of extra benefits for laid-off workers and other stimulus for the economy that Congress approved earlier this year. Economists say the outlook is grim without such support, and the chair of the Federal Reserve has said repeatedly it will likely be necessary.
Trump said that House Speaker Nancy Pelosi was negotiating in bad faith when he called off the talks. But within a couple hours, he appeared to backtrack. He said that he would back more limited programs that would send $1,200 payments to Americans and support the airline industry and small businesses specifically.
Pelosi on Thursday said she was not interested in a standalone measure to help airlines unless it was accompanied by a broader effort that includes COVID testing and other programs that Democrats say are needed as part of a national strategy to “crush the virus.”
The uncertainty over a deal lingered on Friday as Trump declared on Twitter that talks on a new aid package are “moving along. Go Big!”
Meanwhile, White House economic adviser Lawrence Kudlow told reporters that “developments are positive” ahead of a telephone conversation later Friday between Pelosi and Treasury Secretary Steven Mnuchin. At the same time, Senate Majority Leader Mitch McConnell said he doubts a deal will get done before the election.