Daily Market Report May 28th, 2025
After the worst weekly showing since early April last week, the market’s roller-coaster ride created by the President’s trade policies, exploded back upward yesterday, this time because of a delay in his tariffs on the European Union.
The S&P leaped 2% in its first trading since Trump said Sunday that the United States will delay a 50% tariff on goods coming from the European Union until July 9th from June 1st. The European Union’s chief trade negotiator later said on Monday that he had “good calls” with Trump officials and the E.U. was “fully committed” to reaching a trade deal by July 9th.
The Dow Jones jumped 740 points, or 1.8% to 42,343 with 28 of its 30 members on the upside. The S&P gained 118 to 5921 led by the technology leaders plus the financials with 93% of members going higher.
The Nasdaq rose by 2.5% or 462 to 19,199 led by you know who and the Russell 2000 made a large upward move of 50 to 2090. The VIX had no choice but to move lower again, this time down to 18.96. These indices more than recovered their losses from Friday, after Trump announced the tariffs on France, Germany and the other 25 countries represented by the European Union.
Such talks give hopes that the United States can reach a deal with one of its largest trading partners that would keep global commerce moving and avoid a possible recession. Trump declared a similar pause on his stiff tariffs for products coming from China earlier this month, which launched an even bigger rally earlier this month, which launched an even bigger rally at the time.
Caution still remains even if the S&P has climbed back within 3.6% of its record after falling roughly 20% below the mark last month.
A worry is that all the uncertainty caused by on-again-off-again tariffs could damage the economy by pushing U.S. households and businesses to slow down their spending and investments. Surveys have already shown U.S. consumers are feeling worse about the economy’s prospects and where inflation may be heading because of tariffs.
On Tuesday, though, optimism ruled. The stock market’s gains accelerated after a report released by the Conference Board said confidence improved to 98, which was the highest since February.
It was the first increase in six months, and consumers’ expectations for income, business and the job market in the short term jumped sharply, though it still remains below the level that typically signals a recession ahead. About half the survey results came after Trump paused some of his tariffs on China.
NVDA rallied 3.2% and was the strongest single force driving the S&P higher ahead of its profit report tonight. It is the last to report this quarter among the “Magnificent Seven” Big Tech companies that have grown so large that their stock movements can dominate the rest of the market.
It has been riding a tidal wave of growth created by the frenzy around artificial-intelligence technology, but it is also facing criticism that its stock price has shot too high.
INFA climbed 6% after CRM said it would buy the AI-powered cloud data management company in an all-stock deal for $8 billion. The latter rose as well.
A negative was AZO, which fell following a mixed report on its performance for the three months. Its profit fell short of analysts’ expectations, though its growth in revenue was stronger than expected. Its C.E.O. said that commercial businesses did well domestically, but shifting moves in foreign-currency values put pressure on the retailer’s operations outside the United States.
In the bond market, Treasury yields eased to take some of the pressure off the stock market. The yield on the 10-year Treasury fell to 4.44% from 4.51% late Friday. It had been rising last week, in part because of worries about the U.S. government’s rapidly increasing debt.
Yields had been climbing for bond markets around the developed world, particularly in Japan, where a recent auction of longer-term bonds found relatively few buyers. But analysts said worries eased a bit after Japan’s finance ministry sent a questionnaire to bond investors that they took as a signal of efforts to calm the market.
Earnings this week include: yesterday – AZN, PDD lower; today – BOX, DKS, ANF higher and OKTA, M lower; tonight – NVDA and CRM; Thursday – COST, DELL, GPS, NTAP, ULTA, Zscaler.
Economic reports will have: yesterday – preliminary April durable goods orders fell by 6.3%, May Consumer Confidence rose to 98 which was the highest since February; today – minutes of last Federal Reserve meeting at 2pm; Thursday – weekly jobless claims, second reading of Q1 G.D.P.; Friday – April personal income and spending, May U. of Michigan Consumer Sentiment Survey, April P.C.E. inflation report.
By Don Selkin