Stock Market Today: S&P 500 Marks 5-Day Winning Streak, Nasdaq Climbs 7% as Wall Street Shrugs Off Trade War Worries
By Amalya Dubrovsky, Karen Friar, and Ines Ferré
Updated: May 16, 2025, 6:05 PM
U.S. stock markets ended the week on a strong note, with major indexes posting notable gains despite concerns over consumer sentiment and ongoing debates surrounding trade policies. The S&P 500 extended its winning streak to five consecutive days, while the Nasdaq Composite surged approximately 7% over the week, buoyed by easing tensions in the U.S.-China trade relationship.
Major Indexes Close Higher on the Week
On Friday, the S&P 500 (^GSPC) rose nearly 0.7%, continuing its upward momentum and fully erasing its 2025 losses to stand positive on the year. The Dow Jones Industrial Average (^DJI) increased 0.8%, finishing the week up more than 3%. Meanwhile, the technology-heavy Nasdaq Composite (^IXIC) advanced 0.5% on Friday and led weekly gains by climbing almost 7%.
The market’s optimism was largely sparked by a surprising rollback in U.S.-China tariffs announced earlier in the week. This move immediately fueled a strong rally as investors felt reassured by the reduction in trade conflict risks, allowing riskier assets to regain appeal.
Trade War Eases but Cautious Sentiment Remains
Despite the week’s gains, some caution returned to the markets following Walmart’s (WMT) warning about tariff-driven price increases potentially influencing consumer costs. Investors remain watchful as fresh trade negotiations continue, with President Trump signaling that the U.S. will soon send letters to various countries outlining updated tariff rates. However, the White House has acknowledged its limited capacity to negotiate comprehensive trade deals simultaneously with all partners.
Consumer Sentiment Hits Low Amid Inflation Concerns
The positive market momentum contrasted sharply with consumer sentiment data released Friday by the University of Michigan, which revealed growing pessimism among Americans. The sentiment index dropped to 50.8 in May, its second-lowest level on record and down significantly from April’s 52.2. Notably, inflation expectations for the next year surged to a 44-year high of 7.8%, raising concerns about continued price pressures.
Tax and Spending Bill Faces Legislative Hurdles
Wall Street also scrutinized developments around President Trump’s sweeping tax and spending bill, seen by some as a potential boost to the economy. However, the legislation hit a major obstacle when Republicans voted against advancing the measure, signaling complex negotiations ahead. This setback tempered enthusiasm among investors about the bill’s near-term economic benefits.
Notable Stock Performers and Market Highlights
Certain stocks stood out during the rally week. Nvidia (NVDA), a leader in artificial intelligence chip manufacturing, recovered to positive territory for the year. Tesla (TSLA) experienced a fourth consecutive week of gains, regaining ground lost since late April. Additionally, Bitcoin (BTC-USD) remained steady near $104,000, navigating the broader market upswing with relative stability.
Looking Ahead
Market participants will continue to closely monitor the evolving trade dynamics between the U.S. and its global partners, as well as any progress on fiscal policy legislation. While the recent tariff rollback has injected fresh optimism, cautious investors remain wary of inflation trends and potential price hikes that could dampen consumer spending.
As earnings season approaches and further trade negotiations unfold, Wall Street’s focus will be on balancing growth prospects with macroeconomic uncertainties. The current five-day winning streak for the S&P 500, alongside a strong showing from the Nasdaq, signals resilience in equity markets amid the complex economic backdrop.
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