Economic Newsletter for Week of May 29
IN THIS WEEK’S RECAP: TRADE NEGOTIATIONS, INFLATION RELAXATION
WEEKLY ECONOMIC UPDATE
Presented by The PensionmarkMeridien Team, May 19, 2025
MARKET RECAP
Last week brought a temporary U.S.-China tariff cut and softer-than-expected monthly inflation data, making it an opportune time to share an overview of what happened and what’s ahead.
WEEKLY STOCK INDEX PERFORMANCE
The markets saw a strong upswing across the board. The S&P 500 rose by 5.27%1, while the NASDAQ 100 surged even higher with a gain of 6.81%2. The Dow Jones Industrial Average also posted positive results, ending the week higher by 3.41%3.
U.S.-CHINA TARIFF CUTS
It was a big day last Monday for U.S. stocks, thanks to developments in U.S.-China trade relations. The announcement of a temporary tariff cut sparked the largest single-day gains for major U.S. stock indexes for the week. Effective May 14th, both the U.S. and China reduced tariffs on each other, with U.S. tariffs on Chinese imports dropping to 30%4 and Chinese tariffs on U.S. goods reduced to 15%. Despite this progress, some media outlets noted that price hike risks for consumers remain. According to data from the University of Michigan, U.S. consumers expect inflation to spike by 7.3%5 by the end of the year.
INFLATION RELAXATION
Consumer inflation showed signs of easing in April, even as consumer expectations remain elevated. April’s Consumer Price Index (CPI) data revealed a modest 0.2% monthly increase, resulting in a 12-month inflation rate of 2.3%. This figure came in below expectations and marked the lowest reading since February 2021. Shelter remained the primary contributor to monthly inflation, with shelter prices rising 0.3% and accounting for more than half of the overall CPI movement. Wholesale pricing (PPI) also showed improvement, falling to 2.4%6 in April compared to the expected 2.5%.
-QUOTE OF THE WEEK-
“Resilience is not a trait you’re born with. It is a skill you can learn… “
— Dr. Lucy Hone
BULLISH REVERSAL?
Are we in a bear market or a bull market? With so much happening in 2025, it’s a fair question. As of last Monday, the NASDAQ 100 closed the session more than 20% higher than its recent low on April 8th—a benchmark often used to define a bull market. Key drivers of this tech rally have included NVIDIA and Tesla. While the future remains uncertain, we do know that market volatility has normalized from April levels, and investors responded very positively to the progress on tariffs.
THE WEEK AHEAD
The week begins quietly in terms of economic data, but Thursday brings fresh Gross Domestic Product data and minutes from the Federal Reserve’s most recent policy meeting. On Friday, we’ll also get a new look at inflation through the Fed’s preferred gauge: Core Personal Consumption Expenditures. It’s a full trading week ahead, with U.S. equity markets closed next Monday, May 26th, in observance of Memorial Day.
That’s it for this week’s update! If you’d like to delve into these topics further or have any other questions or needs as the week unfolds, don’t hesitate to reach out.
STAY AHEAD
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Citations:
1. Trading View, May 18, 2025
2. Trading View, May 18, 2025
3. Trading View, May 18, 2025
4. Reuters, May 14, 2025
5. Investing.com, May 16, 2025
6. U.S. Bureau of Labor Statistics, May 13, 2025