Daily Market Report May 30th, 2025
A huge rally for stocks that began in Asia on Thursday evening with the Dow stock index futures up by 600 points, the S&P was ahead by 90 and the Nasdaq up by 400 lost steam after sweeping into Europe and the United States amid uncertainty about what will happen next after a U.S. court blocked many of the many of the President’s sweeping tariffs.
When things finally opened here in the U.S, this enthusiasm cooled off and resulted in choppy trading with the indexes gaining and losing ground until they finally settled higher, although nowhere near where those early indications were.
The Dow gained 117 points to 42,215 led by NVDA whose earnings-related stock gained but off its high of the day, in addition to AMGN, BA and V. The S&P ended 23 points higher to 5912 led by NVDA and AMZN. It is now within 3.8% of its all-time high set earlier this year. The Nasdaq added 75 to 19,175 led by mostly techs while the Russell 2000 Index of small stocks added 10 to 2070. And no surprise here, the VIX dropped to 19.18 and one notices that at these lower levels, it is becoming more difficult to go too much lower than this.
It was a moderation after stocks initially leaped nearly 2% in Tokyo and Seoul, where markets had the first chance to react to the ruling late Wednesday by the U.S. Court of International Trade. The court said that the 1977 International Emergency Economic Powers Act that Trump cited for ordering massive increases in taxes on imports from around the world does not authorize the use of tariffs.
The ruling at first raised hopes in financial markets that a hamstrung Trump would not be able to drive the economy into a recession with his tariffs, which had threatened to grind down on global trade and raise prices for consumers already sick of high inflation. Trump has said he wants to bring manufacturing jobs back to the United States, and he warned the process could cause some pain for U.S. households.
But the tariffs remain in place for now while the White House appeals the ruling, and the ultimate outcome is still uncertain. The court’s ruling also affects only some of Trump’s tariffs, not those on foreign steel, aluminum and autos, which were invoked under a different law.
Such uncertainty helped dampen the excitement in financial markets as trading headed through Europe into the United States, where the moves were much more modest than in Asia. The U.S. court’s move was nevertheless seen as a positive for financial markets.
Markets are pricing that this is a better type of uncertainty than what we’ve had since Liberation Day,” one analyst observed.
Tech stocks led the way after NVDA once again topped expectations for profit and revenue in the latest quarter.
The chip company has grown into one of the U.S. market’s largest and most influential stocks because of the frenzy around artificial-intelligence technology, and its 3.2% rise was the strongest force by far lifting the S&P.
C3.ai, an AI application software company, jumped 20% after it reported stronger profit than analysts expected for its latest quarter. It also said the U.S. Air Force increased the maximum possible value for its contract by $350 million to $450 million. The company’s revenue last quarter totaled $108.7 million.
ELF was another big winner and rose 23% after the cosmetics company delivered a stronger profit for the latest quarter than analysts expected. It also said it agreed to buy Hailey Bieber’s Rhode skincare brand in a $1 billion deal. Rhode had $212 million in net sales in the 12 months through March.
Bieber, a model and the wife of singer Justin Bieber, will be Rhode’s chief creative officer and head of innovation and also a strategic advisor to the combined companies.
They helped offset a drop for BBY, which fell even though it reported a stronger profit than expected. Its revenue fell short of analysts’ forecasts.
The electronics retailer also cut its forecasted ranges for revenue and profit over the full year on the assumption that “tariffs stay at the current levels for the rest of the year, and there is no material change in consumer behavior from the trends we have seen in recent quarters,” said its C.F.O.
Many companies have recently said that the uncertainty caused by tariffs is making it too difficult to offer any financial forecasts for the upcoming year.
In the bond market, Treasury yields eased following some mixed reports on the economy. One said that the U.S. economy shrunk by less in the first three months of the year than earlier estimate down to -0.2%. Another said slightly more workers applied for jobless benefits last week than economists expected, at 240K.
The yield on the 10-year Treasury fell to 4.43% from 4.47% late Wednesday.
In stock markets abroad, Japan’s Nikkei 225 jumped 1.9% to help lead Asian markets higher, while stocks rose 1.4% in Hong Kong and 0.7% in Shanghai. South Korea’s Kospi rallied 1.9% after the Bank of Korea cut its key interest rate to ease pressure on the economy.
Earnings this week include: yesterday – NVDA, AI higher and HPQ, ELF, BBY, Dow component CRM lower; today - GPS, AEOS, ESTC, NTAP lower and ULTA, DELL, SBET, ZS, ULTA higher.
Economic reports will have: yesterday – weekly jobless claims rose to 240K, second reading of Q1 G.D.P. improved a bit to negative 0.2%, April pending home sales fell by 6.3%; today – April personal income and spending, May U. of Michigan Consumer Sentiment Survey slipped to 52.2, April P.C.E. inflation report rose by 0.1%.
By Don Selkin