By MICHAEL R. SISAK and LARRY NEUMEISTER

NEW YORK (AP) — Sean “Diddy” Combs was portrayed in his lawyer’s closing argument on Friday as the victim of an overzealous prosecution that tried to turn the recreational use of drugs and a swinger lifestyle into a racketeering conspiracy that could put the music mogul behind bars for life.

Attorney Marc Angifilo mocked the government’s case against Combs and belittled the agents who seized hundreds of bottles of Astroglide lubricant and baby oil at his properties as he began a presentation expected to last several hours.

“Way to go, fellas,” he said of the agents.

He said prosecutors had “badly exaggerated” evidence of the swinger lifestyle and threesomes to combine it with recreational drug use and call it a racketeering conspiracy.

“He did not do the things he’s charged with. He didn’t do racketeering conspiracy and sex trafficking,” the lawyer said.

Agnifilo also called Combs’ prosecution a “fake trial” and ridiculed the notion that he engaged in racketeering. “Are you kidding me? Are you kidding me?” Agnifilo asked. “Did any witness get on that witness stand and say yes, I was part of a racketeering enterprise — I engaged in racketeering?” No, Agnifilo argued, telling jurors that those accusations were a figment of the prosecution’s imagination.

Combs’ family, including six of his children and his mother, were in the audience for the closing.

All his life Combs has taken care of people, Agnifilo said, including the ex-girlfriend who testified under the pseudonym Jane, whose rent he’s paying.

“I don’t know what Jane is doing today,” Agnifilo said. “But she’s doing it in a house he’s paying for.”

Referring to lawsuits filed by Combs’ accusers, he said: “This isn’t about crime. It’s about money. This is about money.”

He noted that Combs’ girlfriend of nearly 11 years — Casandra “Cassie” Ventura — sued him in a lawsuit that was settled for $20 million in a day in November 2023, triggering a federal probe the following day.

“If you had to pick a winner in this whole thing, it’s hard not to pick Cassie,” Agnifilo said.

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Cassie and Jane both testified during the trial that they were coerced repeatedly by Combs to perform in drug-fueled dayslong sex marathons with male sex workers while Combs watched, directed, masturbated and sometimes filmed the encounters.

If convicted, Combs could face a mandatory minimum of 15 years in prison and a maximum of life.

He did not testify during the trial that is in its seventh week.

After Agnifilo completes his closing, Assistant U.S. Attorney Maurene Comey was expected to deliver a rebuttal summation before the judge reads the law to the jury, which is not expected to begin deliberations until Monday.

By DAMIAN J. TROISE, AP Business Writer

NEW YORK (AP) — Stocks rose in morning trading Friday and put Wall Street on track to close a strong week at an all-time high.

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The S&P 500 rose 0.5% early Friday and is on track to surpass its record set in February. The Nasdaq composite rose 0.5% and is also on track for a record. The Dow Jones Industrial Average rose 0.6%, or 273 points, to 43,657 as of 9:58 a.m. Eastern.

A record for the S&P 500 would mark a sharp turnaround from just three months ago, when the key measure of Wall Street’s health fell nearly 20% from the February high on fears that President Donald Trump’s trade policy could harm the economy.

The gains on Friday were broad, with nearly every sector within the S&P 500 rising. Nike soared 15.3% for the biggest gain on the market, despite warning of a steep hit from tariffs.

The broader market has seemingly shaken off fears about the Israel-Iran war disrupting the global supply of crude oil and sending oil prices higher. A ceasefire between the two nations is still in place.

The price of crude oil in the U.S. rose 1%, but has broadly fallen back since last week to levels in place before the conflict began.

Investors are also monitoring potential progress on trade conflicts between the U.S. and the world, specifically with China. Trump said the U.S. and China have signed a trade deal without providing details.

China’s Commerce Ministry also said that the two sides had “further confirmed the details of the framework” for their trade talks. But its statement did not explicitly mention an agreement to ensure U.S. access to rare earths, materials used in high-tech applications that have been at the center of negotiations.

An update on inflation Friday showed prices ticked higher in May, though the rate mostly matched economists’ projections.

Bond yields rose. The yield on the 10-year Treasury rose to 4.28% from 4.24% late Thursday. The two-year Treasury yield, which more closely tracks expectations for what the Federal Reserve will do, rose to 3.75% from 3.72% late Thursday.

Stocks in Europe were mostly higher, while stocks in Asia finished mixed.

By ELAINE KURTENBACH, AP Business Writer

BANGKOK (AP) — The U.S. and China have signed an agreement on trade, President Donald Trump said, adding he expects to soon have a deal with India.

Commerce Secretary Howard Lutnick told Bloomberg TV that the deal was signed earlier this week. Neither Lutnick nor Trump provided any details about the agreement.

“We just signed with China the other day,” Trump said late Thursday.

Lutnick said the deal was “signed and sealed” two days earlier.

It was unclear if the latest agreement was different from the one Trump announced two weeks earlier that he said would make it easier for American industries to obtain much-needed needed magnets and rare earth minerals. That pact cleared the way for the trade talks to continue, while the U.S. agreed to stop trying to revoke visas of Chinese nationals on U.S. college campuses.

China’s Commerce Ministry said Friday that the two sides had “further confirmed the details of the framework.” But its statement did not explicitly mention U.S. access to rare earths, minerals used in high-tech applications that have been at the center of the negotiations.

“China will approve the export applications of controlled items that meet the conditions in accordance with the law. The United States will cancel a series of restrictive measures taken against China accordingly. It is hoped that the United States and China will meet each other halfway,” it said.

The agreement follows initial talks in Geneva in early May that led both sides to postpone massive tariff hikes that were threatening to freeze much trade between the two countries. Later talks in London set a framework for negotiations and the deal mentioned by Trump appeared to formalize that agreement.

“The president likes to close these deals himself. He’s the dealmaker. We’re going to have deal after deal,” Lutnick said.

China has not announced any new agreements, but it announced earlier this week that it was speeding up approvals of exports of rare earths, materials used in high-tech products such as electric vehicles. Beijing’s limits on exports of rare earths have been a key point of contention.

The Chinese Commerce Ministry said Thursday that Beijing was accelerating review of export license applications for rare earths and had approved “a certain number of compliant applications.”

Export controls of the minerals apparently eclipsed tariffs in the latest round of trade negotiations between Beijing and Washington after China imposed permitting requirements on seven rare earth elements in April, threatening to disrupt production of cars, robots, wind turbines and other high-tech products in the U.S. and around the world.

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China also has taken steps recently on the fentanyl issue, announcing last week that it would designate two more substances as precursor chemicals for fentanyl, making them subject to production, transport and export regulations. Trump has demanded that Beijing do more to stop the flow of such precursor ingredients to Mexican drug cartels, which use them to make fentanyl for sale in the U.S. He imposed 20% tariffs on Chinese imports over the fentanyl issue, the biggest part of current 30% across-the-board taxes on Chinese goods.

The agreement struck in May in Geneva called for both sides to scale back punitive tariff hikes imposed as Trump escalated his trade war and sharply raised import duties. Some higher tariffs, such as those imposed by Washington related to the trade in fentanyl and duties on aluminum and steel, remain in place.

The rapidly shifting policies are taking a toll on both of the world’s two largest economies.

The U.S. economy contracted at a 0.5% annual pace from January through March, partly because imports surged as companies and households rushed to buy foreign goods before Trump could impose tariffs on them.

In China, factory profits sank more than 9% from a year earlier in May, with automakers suffering a large share of that drop. They fell more than 1% year-on-year in January-May.

Trump and other U.S. officials have indicated they expect to reach trade deals with many other countries, including India.

“We’re going to have deal after deal after deal,” Lutnick said.

By CHRISTOPHER RUGABER, AP Economics Writer

WASHINGTON (AP) — A key inflation gauge moved higher in May in the latest sign that prices remain stubbornly elevated while Americans also cut back on their spending last month.

Prices rose 2.3% in May compared with a year ago, up from just 2.1% in April, the Commerce Department said Friday. Excluding the volatile food and energy categories, core prices rose 2.7% from a year earlier, an increase from 2.6% the previous month. Both figures are modestly above the Federal Reserve’s 2% target. The Fed tracks core inflation because it typically provides a better guide to where inflation is headed.

At the same time, Americans cut back on spending for the first time since January, as overall spending fell 0.1%. Incomes dropped a sharp 0.4%. Both figures were distorted by one-time changes: Spending on cars plunged, pulling down overall spending, because Americans had moved more quickly to buy vehicles in the spring to get ahead of tariffs.

And incomes dropped after a one-time adjustment to Social Security benefits had boosted payments in March and April. Social Security payments were raised for some retirees who had worked for state and local governments.

Still, the data suggests that growth is cooling as Americans rein in spending, in part because President Donald Trump’s tariffs have raised the cost of some goods, such as appliances, tools, and audio equipment. Consumer sentiment has also fallen sharply this year in the wake of the sometimes-chaotic rollout of the duties. And while the unemployment rate remains low hiring has been weak, leaving those without jobs struggling to find new work.

Consumer spending rose just 0.5% in the first three months of this year and has been sluggish in the first two months of the second quarter.

“Because consumers are not in a strong enough shape to handle those (higher prices), they are spending less on recreation, travel, hotels, that type of thing,” said Luke Tilley, chief economist at Wilmington Trust.

Spending on airfares, restaurant meals, and hotels all fell last month, Friday’s report showed.

At the same time, the figures suggest that President Donald Trump’s broad-based tariffs are still having only a modest effect on overall prices. The increasing costs of some goods have been partly offset by falling prices for new cars, airline fares, and apartment rentals, among other items.

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On a monthly basis, in fact, inflation was mostly tame. Prices rose just 0.1% in May from April, according to the Commerce Department, the same as the previous month. Core prices climbed 0.2% in May, more than economists expected and above last month’s 0.1%. Gas prices fell 2.6% just from April to May.

Economists point to several reasons for why Trump’s tariffs have yet to accelerate inflation, as many analysts expected. Like American consumers, companies imported billions of dollars of goods in the spring before the duties took full affect, and many items currently on store shelves were imported without paying higher levies.

There are early indications that that is beginning to change.

Nike announced this week that it expects U.S. tariffs will cost the company $1 billion this year. It will institute “surgical” price increases in the fall. It’s not the first retailer to warn of price hikes when students are heading back to school.

Walmart said last month that that its customers will start to see higher prices this month and next as back-to-school shopping goes into high gear.

Also, much of what the U.S. imports is made up of raw materials and parts that are used to make goods in the U.S. It can take time for those higher input costs to show up in consumer prices. Economists at JPMorgan have argued that many companies are absorbing the cost of the tariffs, for now. Doing so can reduce their profit margins, which could weigh on hiring.

Cooling inflation has put more of a spotlight on the Federal Reserve and its chair, Jerome Powell. The Fed ramped up its short-term interest rate in 2022 and 2023 to slow the economy and combat inflation, which jumped to a four-decade high nearly three years ago. With price increases now nearly back to the Fed’s target, some economists — and some Fed officials — say that the central bank could reduce its rate back to a level that doesn’t slow or stimulate growth.

Trump has also repeatedly attached the Fed for not cutting rates, calling Powell a “numskull” and a “fool.”

But Powell said in congressional testimony earlier this week that the Fed wants to see how inflation and the economy evolve before it cuts rates. Most other Fed policymakers have expressed a similar view.