Market Recap – Tuesday, May 13, 2025
Stocks Rise on Positive Trade News, Inflation Slows, and Tech Outperforms
Stocks closed higher today, continuing the positive trend from earlier in the week. The S&P 500 and Nasdaq saw significant gains, with major tech stocks like NVIDIA (NVDA) and Tesla (TSLA) leading the charge. Other sectors like energy, airlines, and tech hardware also performed well. The main boost to the market came from positive news about US-China trade talks, though there are still some concerns about the full effects of tariffs.
US-China Trade Deal Boosts Market:
A key driver of today’s gains was the news that the US and China have agreed to lower tariffs on each other’s goods. This is expected to help reduce inflation and support global growth. The US will reduce tariffs on Chinese goods from 145% to 30%, while China will lower tariffs on US goods from 125% to 10%. This trade deal has been welcomed by investors, but there’s still uncertainty about what will happen after the next 90 days.
Inflation and Economic Data:
The latest report on inflation showed that prices are still rising, but at a slower pace than expected. April's core inflation rose 0.2%, bringing the annual inflation rate to 2.8%. While this is good news, some experts believe the full impact of tariffs will hit consumer prices in the coming months. Small business confidence also dipped again, showing that many businesses are still feeling uncertain about the economy.
Sector Performances:
Technology stocks had a strong day, especially in AI and semiconductors, with companies like NVDA and TSLA showing the most growth. Energy stocks also did well, with oil prices rising. However, some sectors like healthcare, telecom, and utilities lagged behind, with ongoing concerns about rising costs in healthcare and potential changes in policy. Retail stocks, particularly online retailers, saw good performance, while food and beverage companies struggled.
Here’s Our Take
The market’s recent growth is driven by the news of a trade deal between the US and China, along with strong performance in technology and energy sectors. While this is positive news, investors should be cautious, as many of these gains may already be priced in. There are still concerns about inflation and the future impact of tariffs. For now, technology, energy, and semiconductors are strong sectors, while healthcare and consumer goods may face more challenges. It’s important to keep an eye on upcoming inflation reports and trade developments, as these will likely influence the market in the near future.
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