The week's big drama surrounded the mounting political pressure on the Federal Reserve Chair, which continued to smolder. Jerome Powell responded overnight to White House demands for information about cost overruns for a renovation project at Fed headquarters - an issue some think could yet be used as a reason for President Donald Trump to fire the Fed boss.
But U.S. economic updates in the backdrop were unexpectedly upbeat.
Following on from Wednesday's forecast-beating industrial numbers for June and relatively benign producer price data, Thursday saw an equally impressive jump in retail sales for the month, another drop in weekly jobless claims and a surprise jump in the Philadelphia Fed's business confidence survey for July.
There were one or two blots in the day's releases, such as another drop in housing indexes and rising input price components in the Philly Fed poll, but the overall picture has cut across much of the pessimism about the state of the economy.
Along with decent second-quarter corporate earnings so far, the week's economic health checks have been enough to lift the S&P 500 and Nasdaq to new record highs, and stock futures are positive again ahead of Friday's bell.
Capturing how investors have been slightly caught off guard, U.S. economic "surprise" indexes have returned to their most positive since May.
But, also partly reflecting why U.S. markets continue to lag many major bourses around the world, the equivalent surprise indexes for the euro zone and G10 countries as a group are even more positive and at their highest over a year.
The flip side of the economic numbers - which leave the Atlanta Fed's GDP model showing 2.4% growth for the second quarter - is that it casts some doubt on any urgency for Fed easing.
Despite that, Fed board governor Christopher Waller - tipped by some as a possible Trump pick to replace Powell as Chair - continued to say rates could be cut as soon as this month.
Waller said he had not been approached about the Fed Chair role and that his views were not political. "The economy is still growing, but its momentum has slowed significantly, and the risks to the employment mandate have increased," he said.
Treasury yields fell back, with 30-year bond yields slipping under 5% again early on Friday. The dollar retreated with them.
Back on the earnings slate, streaming giant Netflix's stock slipped in overnight trading even after a positive report that saw the final season of "Squid Game" lift its revenue and guidance.
The company raised revenue guidance for 2025 to $45.2 billion, citing a weakening U.S. dollar as a one tailwind - a factor that may well be replicated through the rest of the earnings season.
Overseas markets were mostly buoyant too on Friday, with Japan's Nikkei notably bucking the trend ahead of weekend elections.
Prime Minister Shigeru Ishiba's Liberal Democratic Party and its partner Komeito are expected to lose their majority in the upper house and strategists now focus on whether Ishiba will remain in his position or step down.
With attention on the economy, a weak yen and related inflation, there's also concern a new Japanese government may be forced to loosen fiscal policy further, with a possible cut in the national consumption tax.
Recently restive Japanese government bonds, however, rallied into the weekend and yields fell back. The yen held steady after sharp losses this month.
Japan's core inflation slowed in June but different cuts of the report showed more concern and annual rates have now stayed above the central bank's 2% target for well over three years.
Ishiba met with U.S. Treasury Secretary Scott Bessent on trade on Friday and officials said Japan and the United States have agreed to carry on a "constructive dialogue".
The U.S. House of Representatives on Thursday finally passed the so-called "Genius Act" to create a regulatory framework for U.S.-dollar-pegged cryptocurrency tokens known as stablecoins, sending the bill to Trump for signing.
Seen as a watershed for the digital asset industry, House lawmakers also passed two other crypto bills, sending them next to the Senate for consideration. One lays out a regulatory framework for crypto and the other would ban the U.S. from issuing a central bank digital currency.
Bitcoin was steady just under $119,000 on Friday.
