S&P 500 Achieves Record May Performance Amid Tariff Relief Hopes

By Amalya Dubrovsky, Karen Friar, and Alexandra Canal
Published May 30, 2025

Market Overview
U.S. stocks closed the trading day on a strong note, effectively bouncing back from early dips and concluding what has been a notably strong month for investors. The S&P 500 index recorded its best May performance since 1990, rising over 6% throughout the month, while the Dow Jones Industrial Average (DJI) added approximately 4% and the tech-heavy Nasdaq climbed nearly 10%.

Despite fluctuations during the trading session, with the Nasdaq experiencing a decline of 0.3% after earlier losses exceeded 1.6%, all three major indices marked their territory in positive territory both for the day and the month.

Uncertainty in Trade Relations
The financial markets navigated through a complex backdrop of tariff uncertainties in the ongoing U.S.-China trade relations. Recent reports from Bloomberg revealed that the Trump administration is planning to tighten technology restrictions on China. This move is designed to address loopholes exploited by subsidiaries of firms already under sanctions, necessitating U.S. government licenses for transactions involving majority-owned subsidiaries of entities on the Entity List.

These developments come shortly after a troubling post made by President Trump on Truth Social, where he accused China of violating their trade agreement, just weeks after both nations had appeared to reach a temporary truce regarding tariffs.

Scott Bessent, a Treasury Secretary, noted that trade discussions between the U.S. and China seem to be at a standstill, highlighting the necessity of a direct call between Trump and Chinese President Xi Jinping to break the deadlock on issues related to semiconductor curbs and visa policies.

Legal Turbulence Surrounding Tariffs
The trade atmosphere has been further complicated by recent legal challenges; a U.S. appeals court momentarily suspended a lower court’s blockage of Trump’s tariffs, giving the White House until the upcoming Monday to respond to the court’s decision. The administration is exploring various avenues to implement these tariffs effectively, suggesting the potential for ongoing volatility in the market.

Cooling Inflation Data
In contrast to trade tensions, there are indications that inflation may be easing. According to April’s data from the Personal Consumption Expenditures (PCE) index, the essential PCE measurement, monitored closely by the Federal Reserve, increased in accordance with market expectations, both on a monthly and annual basis. Such developments contribute to the overall market sentiment favoring stability and relief from rising price pressures.

Concluding Remarks
As the week and month come to a close, the resilience of the market amidst tariff negotiations and signs indicating cooling inflation paint a complex yet optimistic picture for investors. The rise of tech stocks has been a driving force, underscoring the sector’s continued strength and influence in the current economic climate.

Investors will undoubtedly be keenly watching any further developments regarding U.S.-China relations and other economic indicators as they navigate the turbulent waters ahead.