Stock Market Update: S&P 500 Records Best May in 30 Years Amid Tariff Relief Hopes
By Amalya Dubrovsky, Karen Friar, and Alexandra Canal
Updated: May 31, 2025, 1:24 AM EDT
In a significant and promising turn of events for the U.S. stock market, the S&P 500 notched its best performance for May in three decades, signaling a month of robust trading bolstered by Wall Street’s optimism regarding potential tariff relief. The index rose over 6% in May, marking it as the most successful month since November 2023. ### Positive Performance Across Major Indices
The trading month concluded positively for all three major U.S. indices. The Dow Jones Industrial Average (Dow) increased by approximately 4%, while the Nasdaq Composite experienced a remarkable nearly 10% surge, largely driven by the strength of the technology sector. On the final trading day, however, the Nasdaq saw a slight decline of 0.3% after dropping more than 1.6% earlier in the session. The S&P 500 remained relatively stable, while the Dow edged up by 0.1% as markets rebounded from earlier losses.
Influences of Tariff Uncertainty and Inflation Rates
The stock market’s resilience has been observed amid ongoing uncertainties surrounding tariffs. Recent reports indicate that the Trump administration is planning to expand restrictions on Chinese technology companies, aiming to close loopholes that allowed sanctioned firms to bypass existing regulations. Specifically, the administration intends to require U.S. licenses for transactions involving companies that are majority-owned by entities already placed on the Entity List.
President Trump has been vocal in his criticism of China, accusing the nation of breaching trade agreements, which follows a brief period of reduced trade tensions between the two countries. Experts are observing that trade negotiations between the U.S. and China are currently "a bit stalled," according to Treasury Secretary Scott Bessent, who emphasized the need for a direct dialogue between Trump and Chinese President Xi Jinping to resolve ongoing disputes related to tariffs and technology controls.
Legal Developments Affecting Trade Policy
In a further development that could influence the tariff landscape, a U.S. appeals court paused a previous trade court ruling that blocked Trump’s global tariffs. The court gave the White House until the following Monday to mount a challenge to this ruling, contributing to a complex environment as the administration explores alternative ways to implement tariffs without running afoul of legal challenges.
Inflation Insights Impacting Market Sentiment
Complementing the market’s performance, signs of easing inflation have emerged, as indicated by the latest reading of the Personal Consumption Expenditures (PCE) index. The core PCE, a critical metric closely monitored by the Federal Reserve, registered increases that met market expectations on both a monthly and annual basis, giving investors hope for a more stable economic environment.
Investors will be keenly watching how these developments unfold in the coming weeks, as the interplay between trade policy, economic indicators, and market dynamics continues to shape the sentiment on Wall Street.
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