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US stocks retreated on Friday, stalling a recent rally as investors digested the latest batch of earnings and weighed President Donald Trump's hints at a softer stance on China tariffs.

The Dow Jones Industrial Average ( ^DJI ) fell 0.3%, while the S&P 500 ( ^GSPC ) also slipped 0.3% after the index hit its first record high of 2025 on Thursday. The tech-heavy Nasdaq Composite ( ^IXIC ) gave up 0.5%.

Trump's call at Davos for cuts to US interest rates , oil prices, and taxes spurred investor optimism for his policies, buoying stocks this week. The major gauges ended the holiday-shortened week with gains, demonstrating the power of Trump's comments even as Wall Street questions his ability to execute the changes.

The Dow rose 3%, the S&P put on 2.8% and the Nasdaq gained 3.2% for the week.

On Thursday, Trump said he'd "rather not" impose tariffs on China — a softening in stance that eased some fears over the potential for a trade war. Chinese stocks ( 000300.SS ) rose after the remarks in a Fox interview.

Spirits on Wall Street also received a boost from a strong start to earnings season. But a key test is looming with Big Tech's major players set to report results next week.

Meanwhile, Boeing ( BA ) shares fell 1% after the jet maker said it expects to book a $3.5 billion quarterly loss thanks to strikes and layoffs. And shares of Novo Nordisk ( NVO ) popped on news that its latest weight-loss product delivered favorable results, similar to the company's blockbuster weight-loss and diabetes drugs Wegovy and Ozempic.

Elsewhere in markets, oil ( CL=F , BZ=F ) were little changed but on track for a weekly loss after riding the Trump roller-coaster. Investors were assessing not just the China shift but also the president's demand that OPEC bring down the cost of crude.

Gold ( GC=F ) closed in on a record high as the dollar ( DX-Y.NYB ) pulled back , making the metal cheaper.

Preliminary readings on US manufacturing activity in January marked a seven-month high, according to new data Friday . The company survey indicated expansion with a reading of 50.1, a favorable signal for the economy ahead of the Federal Reserve's policy meeting next week.