Stocks in the U.S. reach new peaks, marking record closing figures, despite earlier concerns surrounding tariffs that had caused a significant drop only a few months prior.
Unleashing Wall Street: Stocks Soar to Record Highs Amid Trade Tensions
Stock markets in the U.S. ended the week on a high note, setting new records despite ongoing trade tensions. Trump administration's trade policies, which once caused a significant drop back in February, seem to have lost their sting.
The S&P 500 surged by 0.5%, surpassing its own record set earlier this year. The escalation from February 19 through April 8 saw the key indicator plummet nearly 20%. The Nasdaq composite and the Dow Jones Industrial Average also notched new peaks, climbing 0.5% and 1%, respectively.
The market's incredible turnaround happened within half the typical timeframe, as per Sam Stovall, chief investment strategist at CFRA. "Investors will breathe a sigh of relief," he said.
The market's resilience can be attributed to several factors, including the ongoing trade negotiations between the U.S. and China. While President Trump's decision to halt talks with Canada momentarily threatened the market's run, it steadied shortly thereafter.
Nike enjoyed the day's biggest gain, soaring 15.2%, despite issuing warnings of potential losses stemming from tariffs. The broader market, meanwhile, appears unfazed by ongoing geopolitical turmoil, such as the Israel-Iran conflict, which seemed poised to disrupt global oil supplies and increase prices.
The price of crude oil in the U.S. remains almost unchanged on Friday, having recovered to pre-conflict levels. Investors and consumers are also watching closely for signs of progress in the U.S.-China trade conflict, particularly as it pertains to the access of critical rare earth minerals for the manufacturing industry.
U.S. Treasury Secretary Scott Bessent announced on Friday that the U.S. and China have signed a trade agreement simplifying the process for American firms to obtain magnets and rare earth minerals from China. These minerals are crucial for the production of high-tech goods, including electric vehicles, wind turbines, and advanced electronics. China's Commerce Ministry confirmed that the two sides have "further confirmed the details of the framework" for their trade talks, though it did not explicitly mention an agreement to ensure U.S. access to rare earths.
Inflation, which remains a significant concern for businesses and consumers, saw a slight increase in May. Despite this, the rate remained relatively stable, with the Fed's preferred gauge, the personal consumption expenditures index, rising to 2.3% in May.
While the impact of ongoing tariffs remains apparent, analysts and economists expect their influence to grow as these taxes continue to permeate businesses and eventually reach consumers. The U.S. has already imposed 10% baseline tariffs on all imported goods, as well as higher rates for Chinese goods and other import taxes on steel and automobiles. However, the economy and consumers have shown remarkable resilience under these tariffs so far.
Stocks in Europe were mostly higher, while those in Asia finished mixed.
[1] "U.S., China strike deal on easing rare earth restrictions: Report" - Reuters, May 18, 2025.[2] "U.S. risks relying on China for rare earths amid trade deal" - CNBC, May 19, 2025.[3] "The U.S.-China Trade War and Its Global Implications" - Council on Foreign Relations, May 2025.
Investors continue to show interest in the stock-market as the S&P 500 surged by 0.5%, setting a new record, despite ongoing trade tensions between the U.S. and China. The ongoing trade negotiations between the two nations, in particular, the recent deal on easing rare earth restrictions, have influenced finance and investing decisions.
