Stock Market Today: S&P 500 Sees Best May in 30 Years Amid Wall Street Optimism on Tariff Relief
By Amalya Dubrovsky, Karen Friar, and Allie Canal | Updated May 30, 2025, 6:24 PM
The U.S. stock market closed a turbulent yet broadly positive May, with the S&P 500 recording its strongest monthly gain since 1990. The benchmark index rose over 6% during the month, marking its best performance since November 2023, as hopes for easing tariffs bolstered investor confidence.
Market Performance Recap
Despite early session losses on Friday, major indices rebounded by the close, capping off a month of solid gains amid a mix of geopolitical tensions and signs of moderating inflation. The Dow Jones Industrial Average gained 4% over the month, while the tech-heavy Nasdaq Composite surged nearly 10%, buoyed by renewed strength in the technology sector.
On Friday’s trading day, the Nasdaq finished slightly lower, down 0.3%, after recovering from an earlier drop exceeding 1.6%. The S&P 500 hovered near the flat line, showing little net change, while the Dow edged up by 0.1%.
Tariff Relief and Trade Talks Drive Market Sentiment
Investors appeared to be betting heavily on the potential for tariff relief between the U.S. and China, despite ongoing trade uncertainties. Bloomberg reported Friday that the Trump administration plans to expand technology restrictions on China by closing loopholes exploited by subsidiaries of already-sanctioned firms. The proposed rule would require companies majority-owned by those on the U.S. Entity List to acquire government licenses before conducting transactions, signaling tighter controls.
President Trump intensified rhetoric about China’s trade practices in a recent Truth Social post, accusing Beijing of breaking trade deal commitments less than three weeks after what was seen as a tentative detente on tariffs between the two economic powers.
Scott Bessent, Treasury Secretary, told Fox News on Thursday that trade talks are currently "a bit stalled" and highlighted the necessity of a dialogue between President Trump and Chinese President Xi Jinping to revitalize the stalled negotiations. The ongoing disputes revolve around restrictions on semiconductor technology exports and visa policies—a complex backdrop to the tariff discussions.
Legal Developments and Inflation Data Add to Market Dynamics
Adding to the trade-related volatility, a U.S. appeals court recently paused a lower court block on Trump’s global tariff policies, giving the White House until Monday to respond. Meanwhile, the administration is reportedly exploring alternative methods to implement tariffs to protect American industries.
On the economic front, inflation data offered some reassurance. The April reading of the Personal Consumption Expenditures (PCE) index, the U.S. Federal Reserve’s preferred gauge for inflation, showed that the “core” PCE inflation rate rose in line with expectations both monthly and annually, suggesting cooling price pressures.
Technology Sector and Nvidia Highlight
Although the broader Nasdaq ended the week with gains, some tech stocks faced pressure. Nvidia shares dropped 3.5% Friday amid renewed U.S.-China trade tensions that raised concerns about restrictions impacting semiconductor manufacturers.
Outlook
With markets digesting a complex mix of tariff news, geopolitical risks, and inflation signals, investors are navigating cautious optimism. The promising gains in May reflect hopes that easing tariff conflicts could spur economic growth and corporate profits. However, looming policy uncertainties suggest volatility may persist.
Summary:
U.S. stock markets rallied in May, with the S&P 500 posting its best month since 1990 amid expectations of tariff relief and cooling inflation. Despite renewed trade tensions and regulatory developments, investors showed resilience, particularly in technology stocks, closing the month on a strong note as they await clarity in trade negotiations between Washington and Beijing.