Photo: Xinhua

US stocks capped off the week on a cheering note, as Wall Street kept a close eye on the variable development of US-China trade relations, which sent investor sentiment into ups and downs. Investors also digested a slew of mixed data that pointed to the health of the US economy.

In the week ending Aug. 30, the Dow rose 2.99 percent, the S&P 500 gained 2.76 percent, and the Nasdaq rallied 2.71 percent.

This week marked generally positive trading sessions for the market with a high start and a tepid ending, with the three major indexes notching steady gains except Tuesday.

On Friday, the three major indexes ended with minor gains and losses, as investors digested a batch of mixed data on consumer activities, among which consumer confidence fell sharply.

The Dow Jones Industrial Average rose 41.03 points, or 0.16 percent, to 26,403.28. The S&P 500 increased 1.88 points, or 0.06 percent, to 2,926.46. The Nasdaq Composite Index declined 10.51 points, or 0.13 percent, to 7,962.88.

Wall Street was rattled by a renewed wave of fears over a potential recession on Tuesday, as the long-dated US Treasury yields retreated sharply during the day.

The spread between the benchmark 10-year Treasury yield and the 2-year yield posed a worrisome inverted curve, which is widely-regarded as a key precursor of a future recession, further stoking risk-off sentiment among global investors.

Meanwhile, the 3-month Treasury yield stood at nearly 2 percent, higher than those of the long-term Treasury yields, including the closely-watched 30-year bond yield, which hit a bit over 1.95 percent in late afternoon.

The declining trend went on during Wednesday morning, as all of the long-dated US Treasury yields continued to pull back, while the short-term 3-month Treasury rate was on the rise. What's worse, the 30-year Treasury yields struck a fresh low of a bit over 1.9 percent at one point during the morning session.

The closely-watched spread between the 2-year yield and the benchmark 10-year yield once widened to 6.2 basis points, hitting an unprecedented level since 2007, according to statistics of global financial services firm Tradeweb.

Yet robust energy and financial stocks underpinned the market later on Wednesday, erasing all the morning losses and wrapping up the day with mild gains.

On the financial front, shares of Goldman Sachs and JPMorgan Chase rose nearly 1.2 percent and 1 percent respectively, among the strong performers in the 30 blue-chip stocks in the Dow.

On the energy front, shares of Chevron and Exxon Mobil rallied nearly 0.9 percent and over 0.7 percent respectively.

The energy and financial sectors also led gains in the 11 primary S&P 500 sectors by rising 1.4 percent and over 0.9 percent respectively around market close.

Meanwhile, Wall Street digested an array of mixed data.

On the economic front, US consumer confidence retreated sharply in August, dampened by persisting fears over escalation in tariffs and trade war.

The University of Michigan's consumer sentiment index declined to 89.8 for August, marking its largest monthly decline since December 2012, the university said in its monthly survey on Friday.

"The recent decline is due to negative references to tariffs, which were spontaneously mentioned by one-in-three consumers," said Richard Curtin, chief economist for the survey. "The data indicate that the erosion of consumer confidence due to tariff policies is now well underway."

Personal consumption expenditures (PCE), a key measure of US household spending, rose 0.6 percent to 93.1 billion US dollars in July, boosted by spending in recreational goods and vehicle, as well as household electricity and gas, the Bureau of Economic Analysis reported on Friday.

Personal income increased 0.1 percent to 23.9 billion dollars last month, and disposable personal income went up by 0.3 percent to 44.4 billion dollars.

"The increase in personal income in July primarily reflected increases in compensation of employees and government social benefits to persons that were partially offset by a decrease in personal interest income," the bureau said in a report.

US pending home sales declined in July, down from the previous two consecutive months of gains, said the National Association of Realtors (NAR) on Thursday.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, dropped 2.5 percent to 105.6 last month.

"Economic uncertainty is no doubt holding back some potential demand, but what is desperately needed is more supply of moderately priced homes," said Lawrence Yun, NAR chief economist, in a statement.

The US initial jobless claims increased to 215,000 last week, up 4,000 from the previous week's revised level, the US Department of Labor said Thursday.

Yet the 4-week moving average, seen as a key metric of labor market conditions, fell to 214,500, a decrease of 500 from the previous week's revised average.

US second-quarter GDP growth was revised to an annualized rate of 2 percent, according to the second estimate released by the Bureau of Economic Analysis on Thursday.

The growth rate was 0.1 percentage point lower than the advance estimate released in July. Real GDP rose 3.1 percent in the first quarter.

"The revision primarily reflected downward revisions to state and local government spending, exports, private inventory investment, and residential investment that were partly offset by an upward revision to personal consumption expenditures," said the bureau.

The Conference Board Consumer Confidence Index fell to 135.1, down from July's rebound at 135.8, said the US business research group on Tuesday.

"Consumers' assessment of current conditions improved further... Expectations cooled moderately, but overall remain strong," said Lynn Franco, Senior Director of Economic Indicators at The Conference Board, in a statement.

"If the recent escalation in trade and tariff tensions persists, it could potentially dampen consumers' optimism regarding the short-term economic outlook," said Franco.

New orders for manufactured durable goods in July rose 2.1 percent to 250.4 billion U.S. dollars, the US Census Bureau said Monday.

This increase came following a 1.8 percent upswing in June, marking the second consecutive monthly gain.

However, shipments of manufactured durable goods in July pulled back 1.1 percent to 254 billion dollars, following the previous two consecutive monthly increases, which indicated contracting business investment.