U.S. and global markets were mixed on May 15, 2025, as investors weighed fresh economic data, corporate earnings, and the fading momentum from the recent U.S.-China tariff truce. While the S&P 500 extended its winning streak, the Nasdaq retreated after a strong run, and the Dow Jones Industrial Average posted modest gains. Economic indicators pointed to an easing of inflation, but also highlighted ongoing growth risks, particularly in the retail sector.
U.S. Markets and Economic Data
• The S&P 500 rose 0.1% to close at 5,892.58, marking its fourth consecutive day of gains and turning positive for the year for the first time since late February. The Dow Jones Industrial Average climbed 0.5%, while the Nasdaq Composite fell 0.3%, snapping a robust six-day rally by technology stocks.
• Market volatility was driven by corporate earnings, and new economic reports drove market volatility. Walmart's earnings revealed that the retailer will raise prices by double digits on several products, citing the retailer's inability to absorb higher costs from tariffs fully. This announcement underscored the broader impact of trade policy on consumer prices and company margins.
• April retail sales showed a marked slowdown, with minimal growth after a March surge as consumers rushed to buy ahead of tariff hikes. Meanwhile, wholesale inflation surprised to the downside: the Producer Price Index (PPI) dropped 0.5% in April, with annual growth at 2.4%. The Consumer Price Index (CPI) also showed inflation at a four-year low, suggesting some relief for consumers even as companies warn of future price increases.
• Despite the recent truce, 87% of U.S. manufacturers surveyed by the Institute for Supply Management plan to pass on some of the anticipated price increases to consumers, signaling that inflationary pressures may persist as the year progresses.
Corporate and Sector Highlights
• Amazon shares have fallen over 6% year-to-date, reflecting uncertainty from shifting trade policies and increased scrutiny on AI investments. The stock did rally earlier in the week on news of a major Saudi AI partnership2.
• Technology giants, including Tesla, Meta, and Nvidia, saw declines after substantial gains earlier in the week, contributing to the Nasdaq's pullback.
• Cisco Systems bucked the trend, rising 4.7% after raising its annual forecast and appointing a new CFO7.
• UnitedHealth shares tumbled nearly 7% following reports of a Department of Justice investigation into its Medicare Advantage business, weighing on the Dow7.
Global and Geopolitical Developments
• European markets closed higher, led by the defense sector, after Germany's new defense minister backed President Trump's proposal for NATO members to increase defense spending to 5% of GDP8. The Stoxx 600 index rose 0.56%, and Germany's DAX gained 0.72%.
• U.K. GDP was surprised by the upside with 0.7% growth in Q1, though economists cautioned about the sustainability of this pace8. The eurozone's Q1 GDP was revised down to 0.3%.
• In the Middle East, Saudi Aramco signed $90 billion in deals with American firms during President Trump's regional visit, supporting sentiment in the energy and industrial sectors6.
• Asian markets were mixed, with most indices declining after previous gains as traders awaited further economic data and policy signals8.
Outlook and Risks
• The initial optimism from the 90-day U.S.-China tariff pause is fading, and markets are searching for new catalysts. Investors are closely watching for upcoming economic data, including flash PMI surveys and central bank decisions in Australia and Indonesia, which will provide further insight into global growth and inflation trends3.
• S&P Global notes that global growth slowed to its lowest in 18 months in April, with exports falling sharply and business optimism at its weakest since the early pandemic period. The ongoing impact of tariffs dampens sentiment and activity, with the possibility of renewed trade tensions when the truce expires on July 3.
Disclosure
This article is for informational purposes only and does not constitute investment advice, an offer to sell, or a solicitation to buy any securities. All information is based on publicly available sources as of May 15, 2025. The author holds no positions in the securities mentioned. Readers should consult financial professionals before making investment decisions.
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