Stock Market Today: S&P 500 Hits Five-Day Winning Streak, Nasdaq Gains 7% as Trade War Concerns Ease
By Amalya Dubrovsky, Karen Friar, and Ines Ferré
Updated May 16, 2025, 7:05 PM EDT
U.S. stocks closed the week with strong gains, as the S&P 500 notched its fifth consecutive day of advances while the Nasdaq surged approximately 7% over the past five trading sessions. This robust market performance reflects renewed investor confidence following positive developments in U.S.-China trade relations and ongoing optimism about economic policies, despite some growing concerns over consumer sentiment and tariff-related inflation pressures.
Market Rally Driven by Eased Trade Tensions
The week began with a surprise rollback of tariffs between the United States and China, signaling a de-escalation in the prolonged trade war that had weighed on global markets. This unexpected development sparked an immediate rally on Wall Street, with major indices climbing steadily throughout the week.
On Friday, the S&P 500 (^GSPC) rose by nearly 0.7%, extending gains for a fifth straight session and effectively erasing all of its 2025 losses to date. The Dow Jones Industrial Average (^DJI) increased 0.8%, while the technology-heavy Nasdaq Composite (^IXIC) added 0.5% on the day, rounding out a week of significant gains.
The Nasdaq’s outperformance was notable, posting a roughly 7% gain — buoyed by strong showings from key technology stocks such as Nvidia (NVDA), which reclaimed positive territory for the year, and Tesla (TSLA), which completed four consecutive weeks of gains, recovering substantial ground since late April.
Investor Optimism Counters Consumer Pessimism
Despite the market upswing, underlying consumer sentiment painted a more cautious picture. The University of Michigan’s latest consumer sentiment survey revealed a decline to 50.8 in May, the second-lowest reading on record, down from 52.2 in April. Inflation expectations worsened, with one-year forecasts climbing to 7.8%, the highest level since 1981. This suggests that while markets embraced the news of tension relief between the U.S. and China, ordinary Americans remain wary of the economic impacts of tariff-driven price increases.
Walmart’s (WMT) recent warning about potential tariff-fueled price hikes has added a note of caution to the market narrative, tempering some of the initial exuberance sparked by trade talks.
Political Developments and Economic Policies in Focus
In Washington, investors also monitored developments around President Trump’s sweeping tax and spending bill, aimed at delivering significant tax cuts expected to stimulate economic growth. However, progress stalled on Friday as Republicans opposed the bill, marking a setback to the administration’s legislative agenda.
Meanwhile, President Trump announced plans to issue letters informing trading partners about upcoming tariff rates, emphasizing the administration’s intent to negotiate new trade agreements selectively due to limited negotiation capacity. Market participants are awaiting further details on these efforts, anticipating additional deals that could influence market dynamics.
Cryptocurrency and Others
Bitcoin (BTC-USD) remained relatively stable near $104,000 as traditional markets climbed, reflecting a growing decoupling between cryptocurrency and stock market movements.
Outlook
Overall, Wall Street closed out a quietly optimistic week, buoyed by easing trade tensions and hopeful economic policies, yet mindful of ongoing inflation risks and political uncertainties. Investors appear willing to remain engaged with risk assets while keeping a watchful eye on forthcoming negotiations and economic indicators.
For more detailed coverage on market trends and key stock performances, stay tuned to Smart Money Mindset.
Sources: Market data and analysis as of May 16, 2025.