US equity indexes traded mixed after midday Friday as investors weighed the surprise improvement in the consumer sentiment data alongside surging inflation expectations.

The Nasdaq Composite rose 0.5% to 17,244.1, with the S&P 500 up 0.2% to 5,493.2. The Dow Jones Industrial Average, however, fell 0.3% to 39,983.6. All three mainstream gauges are heading for a weekly gain following a strong rally in the past three days.

All US equity sectors except consumer discretionary, technology, and communication services fell intraday, with materials among the steepest decliners.

Alphabet's (GOOG, GOOGL) Q1 print was better-than-expected as management highlighted that tariffs would be a "modest" challenge in 2025 and would mostly be from Asia Pacific sellers, while its AI Overview's monetization is also "tracking well," RBC said in a note emailed Friday. Shares rose 2% intraday.

In economic news, the University of Michigan consumer sentiment index was revised upward on Friday to 52.2 for April from 50.8 in the preliminary estimate, compared with expectations for a downward revision to 50.5 in a survey compiled by Bloomberg. That was still below the final reading of 57.0 in March.

Respondents in the Michigan survey expected a 6.5% inflation rate over the next year and 4.4% annual inflation over the next five years, up from 5% and 4.1%, respectively, in March.

Most US Treasury yields fell, with the 10-year down 2.9 basis points to 4.28%, heading for a weekly decline.

On the trade front, China is reportedly weighing exempting some US goods from 125% tariffs, including equipment related to chips, after denying trade tariff talks with the US were ongoing while President Donald Trump insisted discussions between the world's two largest economies were afoot.

Meanwhile, Treasury Secretary Scott Bessent reportedly said trade talks with South Korea showed faster-than-expected progress and suggested an "agreement of understanding" could be announced as early as next week.

Gold futures slumped 1.6% to $3,293.52 per ounce.

West Texas Intermediate crude oil futures fell 0.4% to $62.54 a barrel.