US benchmark equity indexes closed higher Friday as the White House said President Donald Trump is optimistic about striking a trade deal with China.

The Nasdaq Composite rose 2.1% to 16,724.5, while the S&P 500 advanced 1.8% to 5,363.4. The Dow Jones Industrial Average increased 1.6% to 40,212.7. All sectors closed higher, led by materials.

For the week, the Nasdaq jumped 7.3%, while the S&P 500 rallied 5.7%. The Dow grew about 5%.

China on Friday raised its tariffs on US imports to 125%, in response to Trump's move to hike duties on Beijing to 145%. Earlier in the week, Trump announced a 90-day pause for certain tariffs for non-retaliating countries.

Trump has "made it very clear he's open to a deal" with China, White House Press Secretary Karoline Leavitt said, adding that Trump is "optimistic."

In company news, JPMorgan Chase (JPM) and Morgan Stanley's (MS) first-quarter top- and bottom-line results surpassed Wall Street's estimates, while Wells Fargo (WFC) exceeded earnings views.

JPMorgan shares rose 4%, the second-best performer on the Dow, while Morgan Stanley increased 1.4%. Wells Fargo shares closed 1% lower.

JPMorgan Chief Executive Jamie Dimon said the economy is facing "considerable turbulence" due to tariffs and trade volatility. Separately, Wells Fargo CEO Charlie Scharf called for a quick resolution to trade issues. Morgan Stanley said the US economy is unlikely to slip into a recession.

Apple (AAPL) shares rose 4.1%, the top gainer on the Dow.

US Treasury yields moved up Friday, with the two-year rate jumping 12.5 basis points to 3.97% and the 10-year rate adding 10.1 basis points to 4.49%.

US producer prices turned negative last month for the first time since October 2023, the Bureau of Labor Statistics reported Friday. On Thursday, BLS data showed that consumer inflation unexpectedly turned negative in March in what was its first monthly decline since May 2020.

Consumer sentiment soured as year-ahead inflation expectations reached the highest point since 1981, according to preliminary survey results for April from the University of Michigan.

Consumers' five-year inflation projections advanced to 4.4% from 4.1%, something that "should catch" the Federal Reserve's attention, Oxford Economics said. "Keeping inflation expectations anchored is critical for the Fed and one reason we don't anticipate the central bank cutting interest rates until December."

Higher tariffs are likely to increase inflation to between 3.5% and 4% this year, New York Fed President John Williams said.

"Although the economic outlook for this year is coming into better focus, what happens after that remains unclear," Williams said. "A key question is the extent to which this year's higher inflation spills over into subsequent years and how that may affect expectations."

West Texas Intermediate crude oil rose 2.5% to $61.58 a barrel Friday.

Texas Instruments (TXN) shares fell 5.8%, the steepest decline on the S&P 500, as Citigroup adjusted its price target on the stock to $210 from $235.

Gold rose 2.4% to $3,254.70 per troy ounce, while silver jumped 4.5% to $32.16 per ounce.