May 13, 2025

The Pulse: Global Economic and Market News for Tuesday, May 13, 2025

U.S. and global markets extended their rally on May 13, 2025, as investor sentiment remained buoyant following a temporary U.S.-China tariff truce and an encouraging slowdown in inflation. The S&P 500 erased its year-to-date losses, while technology shares led the way, especially in artificial intelligence. However, the Dow Jones Industrial Average lagged due to a sharp decline in UnitedHealth shares.

Market Performance

The S&P 500 surged by 0.72% to 5,886.55, marking a significant turnaround for the index in 2025 after a challenging start amid trade war concerns. This positive momentum is a testament to the resilience of the market and the potential for further growth.

• The Nasdaq Composite surged 1.61% to 19,010.09, driven by substantial gains in AI and technology stocks, notably Nvidia (+5.6%), Broadcom (+5%), and AMD (+4%). Nvidia rallied on the news it will supply 18,000 top-tier AI chips to Saudi Arabia125.

• The Dow Jones Industrial Average fell 0.6% (down 269 points to 42,140.43), weighing an 18% plunge in UnitedHealth shares after the company suspended its full-year outlook and announced a leadership change1234.

• The Russell 2000 index, tracking smaller companies, rose 0.5% to 2,102.352.

Economic Data and Policy Outlook

• April’s Consumer Price Index (CPI) showed inflation slowed to 2.3% year-over-year, below expectations and the slowest pace since 2021. This data eased concerns about persistent inflation and gave the Federal Reserve more flexibility to consider rate cuts later in 1245.

• Bond yields ticked higher, with the 10-year Treasury yield rising to 4.48% as investors grew more optimistic about economic growth prospects4.

• Analysts now expect the Fed’s first rate cut to come in September rather than June, as markets await further clarity on the inflation trajectory and the full impact of tariffs57.

Trade Developments

The Market's continued celebration of the 90-day U.S.-China tariff suspension is a clear indication of the positive impact of this development. The suspension, which rolled back recent tariff hikes and signaled a de-escalation in trade tensions, has significantly improved investor confidence and reversed much of the market's spring decline.

• The truce, combined with a recent U.S.-U.K. trade agreement, has helped restore investor confidence and reversed much of the market’s spring decline167.

Sector and Corporate Highlights

Technology and semiconductor stocks, including Nvidia, Broadcom, and AMD, emerged as the frontrunners in market gains. Their surge, driven by AI optimism and international deals, underscores the promising future of these sectors and the opportunities they present for investors.

• In contrast, UnitedHealth’s sharp drop dragged down the Dow after the company withdrew guidance and replaced its CEO1234.

• In the automotive sector, Honda warned of a $3 billion profit hit from new U.S. auto tariffs5.

• Coinbase Global shares jumped 9.3% after being named to the S&P 500, effective May 197.

Global Markets

• European and Asian equity markets mostly advanced, continuing the risk-on sentiment. However, Hong Kong’s Hang Seng index fell 1.9%, while Japan’s Nikkei rose 1.4%, indicating strong automaker performance4.

• Treasury yields and the U.S. dollar strengthened as investors rotated from safe-haven assets4.

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 13, 2025. The author holds no positions in the securities mentioned. Readers should consult financial professionals before making investment decisions.

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The Pulse: Global Economic and Market News for Tuesday, May 13, 2025

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