Global markets rose on May 7, 2025, as investors digested the Federal Reserve’s decision to hold interest rates steady and monitored progress in U.S.-China trade negotiations. The Fed’s cautious tone and China’s new economic support measures were central to the day’s trading, while concerns over tariffs and stagflation risks continued to weigh on the outlook.
U.S. Markets and Federal Reserve Policy
• The S&P 500 gained 0.4%, the Dow Jones Industrial Average climbed nearly 300 points (0.7%), and the Nasdaq Composite advanced, overcoming early volatility358.
• The Federal Reserve kept its benchmark rate at 4.25%–4.5%, citing heightened uncertainty and increased risks of both inflation and unemployment23910.
• Fed Chair Jerome Powell emphasized a “wait and see” approach, a sign of the Fed's careful management of the economy. He noted the economic outlook is highly uncertain due to ongoing tariff policies and trade disruptions23910.
• Powell declined to commit to rate cuts in 2025, stating future policy would depend on how tariffs and inflation evolve910.
Trade and Global Development
• Optimism grew as U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer prepared to meet with Chinese officials in Switzerland. This signaled a possible thaw in trade tensions, which could potentially bring significant benefits to the global economy.
• China’s central bank announced interest rate cuts and new liquidity measures to support its economy ahead of the talks, boosting Asian markets and contributing to Wall Street’s gains58.
• Despite these positive signals, several U.S. companies-including Ford and Mattel-have withdrawn annual forecasts due to trade uncertainty5.
Emerging Markets and Global Growth
• S&P Global reported that emerging market growth slowed in April, with business confidence falling to near five-year lows amid higher U.S. tariffs and softer global demand6.
• The IMF’s latest World Economic Outlook projects global growth at 3.3% in 2025, with risks tilted to the downside as policy uncertainty and inflation pressures persist. This projection underscores the potential impact on the global economy and the need for preparedness.
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 7, 2025. The author holds no positions in the securities mentioned. Readers should consult financial professionals before making investment decisions.
Sources
- CNBC: https://www.cnbc.com/2025/05/06/stock-market-today-live-updates.html
- CNBC: https://www.cnbc.com/2025/05/07/fed-rate-decision-may-2025.html
- Yahoo Finance: https://finance.yahoo.com/news/live/stock-market-today-dow-sp-500-nasdaq-rise-as-fed-holds-rates-steady-powell-sticks-to-wait-and-see-200523723.html
- IMF: https://www.imf.org/en/Publications/WEO
- Wall Street Journal: https://www.wsj.com/livecoverage/fed-meeting-tariffs-stock-market-05-07-2025
- S&P Global: https://www.spglobal.com/marketintelligence/en/mi/research-analysis/emerging-markets-growth-slows-while-confidence-slips-to-near-fiveyear-low-May25.html
- Bloomberg: https://www.bloomberg.com/news/articles/2025-05-06/stock-market-today-dow-s-p-live-updates
- BNN Bloomberg: https://www.bnnbloomberg.ca/investing/2025/05/07/wall-street-opens-higher-as-china-shores-up-its-economy-ahead-of-trade-talks-with-the-us/
- CNN: https://www.cnn.com/business/live-news/federal-reserve-interest-rate-05-07-24
- CNN: https://www.cnn.com/2025/05/07/economy/fed-rate-decision-may
Recent Articles
Let's talk about your future.
Connect with a local Duncan Williams Asset Management advisor
5350 Poplar Ave.
Suite 600
Memphis, TN 38119
