A temporary US-China trade ceasefire and a series of US Middle Eastern trades eased the fear of stagnation and bulls invaded the market.
News Analysis
US stocks were at Rowaing Roware this week, with the S&P 500 Index winning streak of five days, nearing its all-time high reach last fall. News that it would ease trade tensions between the US and China and a surge in Middle Eastern transactions for US companies dominated trade activities.
The S&P 500 finished at 5,958 on May 16th, up 5.27% in a week. The Dow rose 3.41% to close at 42,654. Nasdaq rose 7.15% to surge to 19,211, while Russell 2000 closed at 2,113, adding 4.46%.
This week’s winners were companies that support easing trade tensions between Washington and the world’s two biggest economies that were hit by countries in the Middle East during their recent presidential visit.
At the top of the list is Nvidia, with stocks increasing by 16.07% over the week.
Cisco Systems was another winner, earning 6.44% due to Middle East partnerships and better revenue and revenue news in the recent fiscal quarter.
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Meanwhile, Boeing won 5.63% after a big order for Qatar Airways’ passenger aircraft.
CoreWeave is one of the big winners of the week, with its shares surged 56.32% in a wave of positive news, including Nvidia’s announcement of the company’s significant stakes and deals with Openai.
Another notable winner is Coinbase Global, which won 33.68% on news that its shares will be joining the S&P 500. This means that the funds tracking the index must include stocks.
Healthcare stocks continued to be behind the lag led by UnitedHealth Group, with the stock down 23.31%. The stock has declined for the third consecutive week following the unfortunate earnings results.
The Chicago Board’s option exchange volatility index has fallen, as most macroeconomic and trade headlines help ease investors’ fears about impending stagflation, and trading this week has not been volatile.
The Market Bulls competed from the gate on May 12th following news of a temporary trade ceasefire between the US and China. This reduced the US tariff rate for Chinese products from 145% to 30%, and the Chinese tariff rate for US products from 125% to 10%.
Wall Street experts welcomed the agreement that emerged from both meetings in Switzerland over the weekend.
“The substantial decline in tariffs between the US and China and the establishment of a framework for continued discussion is exactly what the stock market wanted to see,” said Carol Schreif, Minneapolis’ chief market strategist for BMO private wealth.
The massive rally, which began on May 12th, continued over the next two days, supported by a wave of business deals between Washington and the Middle Eastern countries when President Donald Trump visited the region.
However, the Bears gained the upper hand on the morning of May 15th after Walmart announced the revenue. The retail giant had another strong quarter, but said it would raise prices due to tariffs.
However, the decline was short-lived as crowds appeared “buying dip.”
“There’s a foot in stock market rally. Trade negotiations with China are the toughest in the dockets, and the idea that so many advances have been made in negotiations over such a short period suggests that the solution could be on the horizon.
“As low April is a leadership leader in the technology sector, what is noteworthy about market rebounds was that they were not leading the market in early 2025 before the tariff situation escalated,” Gardner said.
He said the company expects the tech sector to continue its key equity earnings as it is poised to profit from easing trade tensions and renewing investors’ trust in the artificial intelligence outlook.
However, Gardner said the stock market may already be considered with the outlook for weak growth.
“Even if we saw a continuous slowdown in the environment, the stock market may have already been priced during the sale in April,” he said.
