U.S.-China Tariff Deal Eases Market Tensions:
Stocks surged last week, fueled by optimism over positive trade developments and an encouraging inflation report.
The S&P 500 Index rose 5.27% while the Nasdaq Composite Index spiked 7.15%. The Dow Jones Industrial Average added 3.41%. The MSCI EAFE Index, which tracks developed overseas stock markets, increased 0.80 percent.1,2
Source: Bloomberg Finance, L.P. (Performance data normalized 5/9/25 = 0)
S&P, Dow Erase YTD Losses
Stocks pushed higher on Monday as investors cheered weekend news that the U.S. and China temporarily agreed to back off steep reciprocal tariffs.3
Then, a mild inflation report for April—the slowest annualized Consumer Price Index (CPI) reading in four years—boosted markets on Tuesday. Tech stocks powered the rally as the S&P 500 closed trading in the green for the year.4,5
Friday was the Dow’s turn to erase year-to-date losses and get back in the green while the Nasdaq and S&P notched a five-day winning streak.6
Markets closed the week with modest gains, largely looking past weak consumer sentiment data released on Friday.
Sources: U.S. Department of the Treasury, Board of Governors of the Federal Reserve System, Charles Schwab
All Eyes on Economic Data
The retail (CPI) and wholesale inflation reports (Producer Price Index) were mild, although most economists didn’t expect tariffs to impact prices in the first month of implementation.
Retail sales ticked up slightly (as expected), while industrial production and housing starts showed signs of tariff impact.7,8
Expect traders to continue to closely watch economic reports to better understand whether tariffs are showing up in the data.
This Week: Key Economic Data
Source: Bloomberg Finance L.P.
This Week: Companies Reporting Earnings
Source: EarningsWhispers
Author
Gary Aiken
Chief Investment Officer
Concord Asset Management
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Footnotes and Sources
1WSJ.com, May 16, 2025
2Investing.com, May 16, 2025
3CNBC.com, May 12, 2025
4WSJ.com, May 13, 2025
5CNBC.com, May 15, 2025
6MarketWatch.com, May 16, 2025
7WSJ.com, May 13, 2025
8MarketWatch.com, May 16, 2025
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