Financial Update: Week of May 19, 2025
Last week brought a temporary U.S.-China tariff cut and softer-than-expected monthly inflation data, making it an opportune time to share an overview of what happened and what’s ahead. Read on for a bite-sized summary of what you should know.
Weekly Stock Index Performance
- The S&P 500 rose by 5.27%.
- The Nasdaq 100 surged by 6.81%.
- The Dow Jones Industrial Average was higher by 3.41%.
U.S.-China Tariff Cuts
- It was a big day last Monday for U.S. stocks, with developments in U.S.-China trade relations. The announcement of a temporary tariff cut paved the way for the biggest day of gains for major U.S. stock indexes last week on Monday.
- Effective May 14th, both the U.S. and China reduced tariffs on each other, resulting in U.S. tariffs on Chinese imports coming down to 30% and Chinese tariffs on U.S. goods coming down to 15%.
- According to some media outlets, price hike risks for consumers remain, and the U.S. consumer expects inflation to spike by 7.3% by year-end, according to data from the University of Michigan.
Inflation Relaxation
- Consumer expectations aside, consumer inflation showed signs of relaxation in April. April Consumer Price Index data showed a 0.2% monthly increase, resulting in a 12-month inflation rate of 2.3%, below expectations and the lowest reading since February 2021.
- Once again, shelter was the main component pushing the monthly consumer inflation metric higher. Data showed a rise in shelter pricing of 0.3% for the month, which accounted for more than half of the overall move in CPI.
- Wholesale pricing (PPI) also fell in April, declining to 2.4% versus 2.5% expected.
Bullish Reversal?
- Bear market? Bull market? With so much happening in 2025, where do we stand? As of last Monday, as markets reacted to trade and tariff developments, the Nasdaq 100 closed the session better than 20% higher than its recent low made on April 8th.
- One definition of a bull market is a rise of greater than 20% off a recent low. NVIDIA and Tesla have been drivers of the recent tech rally.
- While nobody knows what will happen next with any degree of certainty, we do know that volatility has normalized from April levels, and the markets reacted very positively to the progress on tariffs.
The Week Ahead
- It’s a quiet start to the week economic data-wise. But this Thursday, we get some fresh Gross Domestic Product data and Fed meeting minutes from the last policy meeting. We also get another fresh look at inflation on Friday via the Fed’s preferred inflation gauge, Core Personal Consumption Expenditures.
- It is a full trading week, with the U.S. equity markets closed next Monday, 05/26, in observance of Memorial Day.
That’s it for this week’s update! If you’d like to delve into these topics further or have any other questions or needs as the week unfolds, don’t hesitate to reach out. I am always here as a resource for you.
Disclosure:
This material provided by Levitate. Levitate is not affiliated with Valmark Securities, Inc. and Valmark Advisers, Inc. Indices are unmanaged and do not incur fees, one cannot directly invest in an index. Diversification does not guarantee investment returns and does not eliminate the risk of loss. Past performance does not guarantee future results. The information provided has been derived from sources believe to be reliable, but is not guaranteed as to accuracy and does not purport to be complete analysis of the material discussed, nor does is constitute an offer or a solicitation of an offer to buy any securities, products or services mentioned.