Market Recap – Monday, May 5, 2025
Market Pullback Amidst Uncertainty: Oil Struggles and Economic Concerns Weigh on Stocks
US stocks were lower today, ending a streak of nine straight days of gains for the S&P 500. The market tried to bounce back in the afternoon but couldn’t hold on. While there were some positive sectors, like airlines and banks, overall, the market took a bit of a step back after a strong run. The oil market also struggled with prices falling again, adding to the uncertainty. US Treasury bonds saw yields rise, signaling some concern about future economic conditions.
Which Sectors Performed Well and Which Didn’t?
Some sectors like airlines, managed care, and building products did well, while others like energy, entertainment, and healthcare struggled. Big tech companies like Tesla and Apple were among the weakest performers of the day.
Economic Data
The US services sector showed signs of growth, with the ISM Services index coming in stronger than expected, but prices for services are rising, which is a concern. Although there’s some growth, the economic outlook is still clouded by trade tensions and uncertainty.
Oil and OPEC+
Oil prices continued to drop, hitting their lowest point in four years. OPEC+ countries agreed to increase oil production, which is likely to keep prices under pressure. Meanwhile, ongoing tensions in the Middle East are also influencing oil prices.
Corporate News
Berkshire Hathaway reported slightly lower earnings than expected due to damage from wildfires, but the bigger news was that Warren Buffett announced he would step down as CEO by the end of this year. Other companies, like Skechers and Intuitive Surgical, also made big moves, with Skechers being bought out and Intuitive Surgical announcing a large share buyback.
Here’s Our Take
The market is still dealing with a lot of uncertainty, from trade issues to inflation concerns. While some sectors are doing better than others, like banks and airlines, there are still concerns about slowing consumer spending and the overall economy. Oil prices may continue to be unpredictable due to ongoing geopolitical issues. Investors may want to be cautious and focus on stable sectors while keeping an eye on how global events affect the market. As we move through this period of uncertainty, it's important to pay attention to trade updates and any further actions from the Federal Reserve on inflation.
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