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Market Report for Monday, May 19, 2025

Stocks tripped on the welcome mat Monday morning after a Moody’s downgrade to America’s credit rating, then found enough spine to notch a sixth straight win for the S&P 500. Wall Street’s moral: shrug off the future, believe in the bounce.

Level Change 5/19/25 (%)
– – – – – – – – – – – – – – –
+0.3 Dow
+0.0 Nasdaq
+0.1 Nasdaq 100
+0.1 S&P 500
-0.3 S&P 400
-0.6 S&P 600

The market began the week trying to digest Friday’s post-close downgrade of US credit by Moody’s, which cut the government’s rating from Aaa to Aa1 — still elite, but no longer valedictorian. Treasury Secretary Scott Bessent blamed Biden’s “reckless spending.” National Economic Council Director Kevin Hassett called US debt “the safest bet on earth.” If by “safest” he means “too big to fail and too stubborn to change,” then yes, sleep well.

Numbers speak louder than talking points. Under Biden, the national debt climbed 31%, lower than Trump’s 39% in his first term. Before them, Obama racked up 64%, Bush 73%, and Clinton — the austerity poster child — 29%. It turns out debt denial is bipartisan.

Trade remained a tariff tug-of-war. Bessent warned that holdout countries could face a return to April 2’s “Liberation Day” sky-high rates, while Hassett dangled a more optimistic line: 15 countries are “close” to a deal. It’s diplomacy by boomerang: throw the tariff, wait for it to circle back as a “deal.”

Trump, irked by the predictable fallout of his own policies, took aim at Walmart (WMT -0.1%) for warning about price hikes. He told the king of everyday low prices to “eat the tariffs.” That may thrill voters, but shareholders exhibit a preference for profit margins and an aversion to charity at scale.

Fed officials made the rounds, each delivering a slight variation of “wait and see.” Jefferson and Kashkari stuck to the script. Bostic expressed worry over inflation and favored just one cut this year. Williams said a September start to easing still makes sense — which markets already assumed. Nothing beats having your homework graded by the guy copying it.

JPMorgan (JPM -1.0%) reiterated its $94.5B net interest income guidance but floated the chance of upside if consumers stay resilient. CFO Jeremy Barnum flagged tariffs and geopolitics as wild cards, while Consumer Banking Chief Marianne Lake said consumers remain strong but anxious. Small business confidence has eroded behind a stack of import invoices.

Despite it all, the bounce from April’s tariff lows has now cleared 19%. The S&P is up for the year. But with inflation eyeing Walmart’s checkout line, trade policy improvisational, and sentiment brittle, it’s best not to get too cozy. We’re six wins in, but it’s the kind of momentum built up after a few drinks.

— Jason Kelly

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Market Report for Friday, May 16, 2025

Wall Street wrapped the week on a high, still basking in the afterglow of trade-ledge talkdowns. Friday’s session closed near its peak, as if investors decided the safest hedge was optimism. Gold sulked at the absence of calamity…

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Market Report for Thursday, May 15, 2025

Wall Street kept its head above water Thursday, paddling through oil-country rumors, retail grumbles, and supply shock whispers. The Nasdaq paused for breath, but the rest of the market managed a modest rise despite a fresh round of tariff Tetris for corporate America.

Level Change 5/15/25 (%)
– – – – – – – – – – – – – – –
+0.7 Dow
-0.2 Nasdaq
+0.1 Nasdaq 100
+0.4 S&P 500
+0.2 S&P 400
+0.6 S&P 600

Stocks are trading like last month’s panic was just a fever dream. The S&P 500 is within 4% of record highs, and the Nasdaq 100 has pole-vaulted from bear to bull. Easing trade tensions and a White House that sounds less like it’s spoiling for a fight are giving buyers reason to keep pressing the gas.

And today, mixed data, middling earnings, and muted Fedspeak left equities to interpret their own tea leaves. They brewed a mild blend.

Bonds reminded everyone who’s boss, and gave permission for stocks to stretch their legs. Investors exhaled as Treasury yields edged lower. The 10-year yield fell 10 basis points to 4.43%, easing pressure on equities after flirting with 4.50% earlier in the week. It wasn’t a breakout, but it was a break.

Retail sales flubbed the forecast across the board—headline, core, control group all underwhelmed. March was revised higher, softening the sting, but April showed that shoppers didn’t just pause, they RSVP’d no.

However, core PPI surprised to the downside in its biggest monthly drop in five years, thanks to sagging wholesale margins on machinery and vehicles. Not bad news, suggesting as it does that inflation’s still curled up somewhere in the supply chain, hitting snooze.

Initial jobless claims ticked up a bit less than feared, but continuing claims moved higher. Industrial production flatlined, the Empire State survey flopped, and the NAHB housing index sank to a six-month low. The Philly Fed missed, but not by much—an achievement in a world where “less disappointing” counts as bullish.

Fed Chair Powell skipped rate talk Thursday, preferring the safer pastures of long-term strategy tweaks and a renewed love letter to the 2% inflation target. He warned the economy may be entering a stretch of frequent supply shocks, a theme he’s repeated in recent weeks. Tariffs didn’t make the script this time, but Powell and others have made clear: they expect tariffs to slow growth and stoke inflation—just the kind of balancing tightrope central bankers dream about.

Corporate highlights offered a study in contrasts.

Walmart (WMT -0.5%) beat earnings and stuck to its full-year guidance, but warned that even it can’t outmuscle tariffs forever. “We will do our best to keep our prices as low as possible,” said CEO Doug McMillon, but tariffs don’t shop at Walmart. April and May have already seen sticker creep. By June, said CFO John David Rainey, shopping carts will bear the full weight of a trade policy even its architects can’t quite explain. About 15% of Walmart’s products come from China—the tariff minefield—while 60% are groceries, mostly tariff-proof thanks to domestic and North American sourcing. Unfortunately, canned corn doesn’t offset a $50 toaster.

Cisco (CSCO +4.9%) beat estimates and talked up AI momentum: customers are spending big on security and software, but didn’t panic-order ahead of tariff hits. Sure, maybe a client here or there pulled the trigger early, said CEO Chuck Robbins, “But we looked at a ton of data points to see if we saw any signs of broad-based pull-ahead business, and we did not.” In this economy, AI spending is right up there with bread and milk.

Meanwhile in Qatar, Trump took time to scold Apple (AAPL -0.4%) for shifting iPhone production from China to India in a bid to sidestep tariffs. Build them in America, he urged, apparently unfazed by the $3,500 price tag such patriotism would require. That’s Wedbush’s estimate for a US-made model. Apple CEO Tim Cook may be Trump’s friend, but he’s not suicidal. Triple the price, and even Apple fans might start making eye contact again.

And in coffee news, Starbucks (SBUX +0.8%) is reportedly considering selling part of its struggling China business, according to Bloomberg. The Seattle siren has been out-foamed by local champs like Luckin and Chagee, which have now set their sights on US shores. America, gird your loins: the next great trade war may be fought in tapioca pearls and lavender cold brew.

No blowouts, no breakdowns. Just a market inching through muted data, cautious guidance, and the drip-drip of tariff fallout. Some days, treading water is a win.

— Jason Kelly

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Market Report for Wednesday, May 14, 2025

Wall Street split the difference Wednesday, as AI rode a sovereign wave and small caps got swept out to sea. The S&P tiptoed higher, the Nasdaq extended its winning streak, and Nvidia put on its Sunday best for the Saudi crown.

Level Change 5/14/25 (%)
– – – – – – – – – – – – – – –
-0.2 Dow
+0.7 Nasdaq
+0.6 Nasdaq 100
+0.1 S&P 500
-0.3 S&P 400
-1.1 S&P 600

The market split like a dinner party: AI aristocracy enjoying tea in the parlor with petro-royalty, small caps out back with the caterers. The Dow drooped, the S&P wobbled, and the Nasdaq sauntered higher on the shoulders of its datacenter demigods.

At the center of the fanfare was sovereign AI, the new global prestige project. Think building a national airline, only with more GPUs and fewer peanuts. In Riyadh, President Trump, Nvidia’s Jensen Huang, and a caravan of Silicon Valley titans unveiled a mega-deal with Humain, the Saudi Public Investment Fund’s AI darling. The blueprint: a 500-megawatt petaflop playground stacked with Nvidia’s next-gen GB300 chips. That’s a lot of thinking in a place where even the sand needs shade.

Nvidia (NVDA +4.2%) rode the headlines like a sultan on a stallion, robes billowing and valuation rising. Advanced Micro (AMD +4.7%) trotted close behind, chipper enough to tack another $6B onto its buyback plan, bringing the total to $10B. Bank of America pegs the long-term payoff for Nvidia’s global AI empire at $500B. That’s “B,” as in “buy every dip.”

The sovereign AI push isn’t just a sales opportunity, it’s geopolitical insulation. Countries want language models that speak their language, reflect their worldviews, and in the Saudi case, their selective historical memory. Humain’s new LLM, “ALLAM,” is trained in Arabic and English, but won’t say a word about Jamal Khashoggi, the Washington Post columnist the CIA says was murdered and dismembered by a Saudi hit squad in 2018. The model’s response? No comment, no memory, no trace. Even artificial intelligence can be taught which sand not to kick.

Elsewhere, a modest recession reprieve gave bulls reason to squint at the horizon. Back on April 19, Apollo’s chief economist Torsten Slok panicked over tariffs and slapped a 90% recession chance on 2025. Today, with tariffs on timeout, he dropped the odds to 30% and declared “tail risk has been removed.” If you ever doubted your own ability to flip a coin and spout off with the overpaid, under-correct crowd of macro mystics, here’s your cue. Nobody knows nuttin’.

Despite the collective exhale, Main Street’s not exactly uncorking the elderflower tonic. The Russell 2000 slumped 1.1%, suggesting sovereign AI deals don’t reach the hardware store in Dubuque. Gold tumbled 1.8% to below $3200/oz, its worst showing in a month, as traders shifted from shiny rock to silicon gods. Sorry, goldbugs: Armageddon missed its window.

The market’s mood remains directionally confused but semantically thrilled. If you’ve got export clearance and an AI roadmap, you’re golden. If you’re just trying to sell soda and lumber through a tariff maze, may fortune smile upon you. AI is the new oil. If you’re not in the room with the sheikhs and servers, you’re not just behind the curve, you’re in the wrong century.

— Jason Kelly

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Market Report for Tuesday, May 13, 2025

Wall Street found reasons to cheer on Tuesday—the glow of temporarily lower-but-still-high tariffs, inflation riding an ice cube on a waffle iron—but one oversized HMO dragged the Dow to the infirmary…

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