Stocks firmed Friday amid good earnings news and as investors continued to expect positive trade news. The Dow Jones industrial average gained 0.5 percent, the S&P 500 firmed 0.4 percent, and the Nasdaq was up 0.2 percent. US Treasury yields and oil prices declined while the dollar was mostly higher.

More reports that the European Union and the US are closing in on a trade pact as soon as this weekend. EU Commission President Ursula von der Leyen is reportedly scheduled to meet President Trump this weekend in Scotland. Reports that the US and China would resume trade talks were also seen as positive.

Gains were across most stock sectors and the S&P 500 and Nasdaq both set new closing records and recorded gains for the week. Megacaps had a good day as the market is anticipating favorable results next week.

Market Reflections track market reaction to the trading day's major events. Economic data, policymaker speeches, and company news are featured in this report as well as key indexes and financial instruments.

Understanding why markets respond as they do is fundamental for an investor. Market Reflections help explain how the day's events, news, and data impact the outlook for the economy and for market prices.