WEEKLY MARKET RECAP – MAY 16, 2025

The S&P 500 climbed more than 5% for the week, as major U.S. stock indexes rebounded strongly from the previous week’s modest declines. It marked the fourth positive week out of the last six, signaling continued recovery from the sharp downturn seen from late February through early April.

Most of the week’s gains came on Monday, driven by progress in trade talks between the U.S. and China. Negotiators from both countries agreed to temporarily cut rates on many recently imposed tariffs for 90 days while working toward a more permanent trade agreement.

The NASDAQ, which has experienced greater volatility than other major indexes in recent months, officially entered bull market territory on Monday, just six weeks after dipping into a brief bear market. A 4% surge that day pushed it more than 20% above its April 8 low. By Friday, the NASDAQ had closed within 5% of its all-time high set on December 16, 2024.

April’s Consumer Price Index report showed that inflation continued to ease, despite the rollout of new tariffs. Prices were up 2.3% year-over-year, a slight decrease from March’s 2.4% rate, and the slowest pace since February 2021. Core inflation, which excludes food and energy, remained steady at 2.8% on a yearly basis.

Consumer confidence declined for a fifth consecutive month, reaching its lowest level in nearly three years. According to preliminary data released Friday by the University of Michigan, the Index of Consumer Sentiment dropped to 50.8 in May, down from April’s final reading of 52.2. The result came as a surprise, as most economists had expected an improvement.

Investor anxiety also eased, with the Cboe Volatility Index (VIX) falling for the seventh straight week. By Friday, the index had dropped roughly 67% from its April 8 closing high, returning to levels last seen at the end of 2024, when concerns over tariffs were at their peak.

Gold prices declined for the third time in four weeks, temporarily halting a strong year-to-date rally. On Friday, gold was trading near $3,200 per ounce, down nearly 5% for the week and well below the record high above $3,400 reached in April.

Retail sales showed a modest increase in April, rising 0.1% following a sharp 1.7% jump in March. The earlier surge was largely attributed to a wave of consumer spending ahead of expected price hikes from new tariffs.