Stock Market Today: S&P 500 Hits 5-Day Winning Streak, Nasdaq Climbs 7% for the Week as Wall Street Shakes Off Trade War Concerns
May 16, 2025 | By Amalya Dubrovsky, Karen Friar, and Ines Ferré
U.S. stocks closed the week on a positive note, with the S&P 500 marking its fifth consecutive day of gains and the Nasdaq Composite soaring approximately 7% over the past five trading days. This robust performance comes amid easing tensions in the ongoing U.S.-China trade conflict and renewed investor appetite for riskier assets.
Market Advances Amid Trade Optimism
The S&P 500 rose nearly 0.7% on Friday, pushing its weekly gain to more than 5% and erasing all losses for the year 2025. The Dow Jones Industrial Average also advanced 0.8% on the day, culminating in a weekly increase exceeding 3%. Meanwhile, the technology-heavy Nasdaq outpaced other major indexes, climbing 0.5% on Friday and accumulating around a 7% gain for the week.
The optimism across the market was sparked earlier in the week by an unexpected reduction in tariffs between the U.S. and China. This “surprise tariff rollback” instilled confidence among investors, prompting a strong rally and encouraging a return to what many are calling a “market of normality.”
Caution Amid Consumer Sentiment Concerns
Despite the rally, some caution persists. Consumer sentiment took a hit in May, according to the latest University of Michigan consumer sentiment report. The index dipped to 50.8, its second-lowest reading on record and down from 52.2 in April. Inflation expectations at the one-year mark surged to 7.8%, a level not seen since 1981, underscoring growing apprehensions about rising prices and economic pressure on households.
This consumer unease comes amid concerns over tariff-driven price increases, highlighted last week by a cautionary warning from retail giant Walmart about potential cost impacts resulting from trade policies.
Political and Trade Developments in Focus
Investors are closely watching ongoing political dynamics, notably President Trump’s comprehensive tax and spending bill. Although the bill, aiming to introduce significant tax cuts and bolster economic growth, encountered resistance on Friday when Republicans voted against it, delaying its progress. This development injects some uncertainty into the market outlook in the near term.
In trade matters, the administration announced it would soon send formal notifications to various countries regarding tariff rates on imports. President Trump indicated that due to limited administrative capacity, negotiations with all trade partners cannot proceed simultaneously, but additional deals are expected as part of the broader trade strategy.
Sector Highlights and Notable Stocks
Among individual stocks, AI chip manufacturer Nvidia posted gains that returned its shares to positive territory for the year. Tesla also caught investors’ attention, recording its fourth straight week of gains and recovering substantially from mid-April lows.
Additionally, Bitcoin maintained relative stability near the $104,000 mark on Friday. The cryptocurrency’s steadiness contrasted with the general upswing in the traditional markets.
As the week concludes, the markets reflect a careful balancing act—optimism fueled by trade breakthroughs and fiscal policy prospects tempered by rising consumer inflation concerns and political challenges. Investors remain vigilant, anticipating further developments in both trade negotiations and legislative action that could shape the trajectory of the market moving forward.
Stay tuned to Smart Money Mindset for ongoing updates and in-depth analysis.