US stocks have best week since January

U.S. stocks capped the best week since January, with the S&P 500 Index climbing above 2,500 for the first time, as investors showed resilience in the face of a North Korean missile test. The dollar weakened after an unexpected decline in August retail sales raised concern over the economy’s strength.

Investors largely shrugged off the latest rise in tensions on the Korean peninsula and a terrorist attack in London, with haven assets from the yen to gold declining. The S&P 500 took the round-number milestone in the final minutes of trading to end the week with a 1.6 percent advance. The Dow Jones Industrial Average also closed at a record. The greenback pared its biggest weekly gain since February as the Bank of England’s hawkish shift bolstered the pound.

With economic themes back in the foreground, markets are showing signs of becoming conditioned to provocative actions from North Korea, which has launched more than a dozen missiles this year and tested a nuclear device. The August decline in sales and downward revisions to the prior months make it more likely that consumption, the biggest part of the economy, will be hard-pressed to match the 3.3 percent growth pace of the prior quarter.

Oil had its biggest weekly gain since late July as Texas refineries recovering from Hurricane Harvey processed more crude and global demand forecasts brightened.

The Paris-based IEA said on Wednesday it expects global demand to climb this year by the most since 2015 while the Organization of Petroleum Exporting Countries and its partners were said to be discussing an extension of its deal to cut output beyond its March expiration.

Investors had been shifting funds from U.S. equities to stock markets in Europe, Japan and emerging markets. A net $4.7 billion has been taken out of U.S. equity funds since the beginning of the year, while European stocks are sitting on an inflow of $31.7 billion and Japanese equities $36.4 billion.