May 19, 2025

Midday Market Roundup for Monday, May 19, 2025

Good afternoon. Here are the top four global financial and economic topics shaping markets at midday, Monday, May 19, 2025:

1. U.S. Credit Rating Downgrade Shakes Markets

U.S. stock markets opened the week under pressure after Moody's downgraded the U.S. long-term credit rating by one notch to Aa1 from Aaa, citing the nation's growing budget deficit and higher borrowing costs. This move aligns Moody's with other major agencies and has rattled investor confidence. The S&P 500 fell 0.2%, the Nasdaq dropped 0.3%, and the Dow Jones Industrial Average was little changed, with futures indicating deeper losses earlier in the session. Treasury yields climbed, with the 10-year yield rising to 4.44% and the 30-year yield surpassing 5% for the first time since 2023. Gold prices rebounded as investors sought safe havens, while crude oil prices slipped ([CNBC TV18; [Bloomberg]; [Yahoo Finance]).

2. Tech and Consumer Stocks Lead Declines

Technology and consumer discretionary sectors led the market's downturn, reversing last week's substantial gains. Tesla shares fell 3.6%, Palantir dropped 4%, and other recent high-flyers gave back some of their advances. UnitedHealth Group, however, rebounded nearly 7% after a sharp decline last week as investors responded to news of CEO changes and suspended guidance. Reddit fell over 4% following a downgrade by Wells Fargo, while Alibaba slipped after reports of U.S. concerns about Apple's use of Alibaba's AI technology in China ([CNBC]5; [Yahoo Finance].

3. China's Factory Output Resilient, Retail Sales Disappoint

China's April economic data showed factory output slowing but remaining more resilient than expected, suggesting government support measures cushion U.S. tariffs' impact. Industrial production rose 6.1% year-over-year, below March's 7.7%, while retail sales increased 5.1%, missing forecasts and down from March's 5.9% gain. The real estate sector remains weak, and economists warn that ongoing tariffs and soft consumer demand could weigh on growth. Policymakers are expected to introduce further stimulus to support the recovery, especially as deflationary pressures and weak lending persist ([Reuters], [S&P Global].

4. Global Growth Outlook Remains Uncertain as Tariff Pause Continues

While last week's U.S.–China tariff truce temporarily lifted markets, global growth prospects remain subdued. PMI surveys show global exports fell at the sharpest rate in over two years in April, and business optimism is at its lowest since early in the pandemic. The international trading environment remains highly uncertain, with the current 90-day pause on additional tariffs set to expire in mid-July. Central banks in Australia and Indonesia are meeting this week, expecting further easing to counteract global trade headwinds ([S&P Global].

Sources

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The information provided in this article is for informational purposes only and does not constitute investment, legal, or financial advice. The content is not intended as a recommendation to buy or sell any security or investment product. Readers should consult with qualified financial, legal, and tax advisors before making any investment decisions.

The views and opinions expressed are based on sources believed to be reliable, but their accuracy or completeness is not guaranteed. Any forward-looking statements are based on current expectations and projections, which may change without notice.

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Midday Market Roundup for Monday, May 19, 2025

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