Market Recap – Friday, May 23, 2025
Trade Tensions and Economic Concerns Weigh on Markets Despite Positive Housing Data
Stocks ended the week on a down note. Major US stock indexes like the Dow, S&P 500, and Nasdaq all dropped, with the Russell 2000 also ending lower. Though stocks were down most of the day, they recovered a bit before the market closed. The drop was mainly due to concerns about trade, rising bond yields (interest rates), and uncertainty about the economy.
Sector Performance:
Stocks that went down: Many big tech companies, like Apple (AAPL), lost value. Other industries that struggled included airlines, banks, and companies that sell consumer goods, like Deckers Outdoor (DECK) and Ross Stores (ROST).
Stocks that performed well: Utility companies, some energy stocks, and companies in the nuclear power sector saw gains. Gold also went up, which helped mining companies that dig for precious metals.
Bonds and the Dollar:
Bond yields increased a bit, and the value of the US dollar went down. Analysts are worried that rising debt levels and trade issues could continue to hurt the dollar.
Trade and Economic Policy:
Trade news: President Trump threatened the European Union (EU) with a 50% tariff on their goods starting June 1st. He also said Apple (AAPL) must make iPhones in the US or face a 25% tariff. These comments created more worry for the market, especially for tech companies like Apple.
Housing Market: On a positive note, new home sales in the US went up by 10.9% in April, which was much higher than expected. However, the housing market still faces challenges with high mortgage rates and affordability issues.
Earnings Reports:
Retail companies reported mixed results. Target (TGT) had disappointing results and lowered its expectations for the rest of the year. On the other hand, Lowe's (LOW) and Home Depot (HD) did a bit better, sticking to their forecasts despite concerns about tariffs.
Notable Stock Moves:
Top Gainers:
United States Steel (X): Soared after President Trump announced a partnership with Nippon Steel, keeping the company based in the US.
NuScale Power (SMR): Rose after Trump said he would push for more nuclear power production.
Informatica (INFA): Gained after it was reported that Salesforce (CRM) is in talks to buy the company.
Top Decliners:
Deckers Outdoor (DECK): Dropped due to slower sales of HOKA shoes and concerns about future profits.
Booz Allen Hamilton (BAH): Fell after missing revenue and profit expectations, and offering weak guidance for the rest of the year.
Xerox Holdings (XRX): Cut its dividend by 80% due to uncertainty around trade policies and upcoming changes to its business.
Here’s Our Take
Trade issues were the big story today, with President Trump threatening new tariffs on the EU and Apple. While the housing market showed some positive signs, the overall market was worried about the impact of tariffs on businesses. Next week, investors will be watching economic reports on consumer confidence, durable goods, and business activity to get a better sense of where the economy is heading. The ongoing debate over fiscal policies, including tax changes, will likely continue to weigh on the market. We’ll also get more economic data next week, which should give us a clearer picture of how consumers and businesses are doing.
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