Market Recap: S&P 500, Dow, and Nasdaq Retreat as PPI Data Shows Tariff Impact

Major Indexes Pull Back After Recent Rally

The U.S. stock market retreated on Thursday, May 15, 2025, as investors digested a slew of economic data and corporate earnings reports. After a strong rally earlier in the week, all three major indexes moved lower, with concerns about inflation and trade tensions weighing on sentiment.

The S&P 500 fell 0.45%, the Dow Jones Industrial Average dropped 0.59%, and the Nasdaq Composite declined 0.49% as of market close. This pullback follows a strong performance earlier in the week, with the tech-heavy Nasdaq having previously enjoyed a six-day winning streak.

Producer Price Index Shows Tariff Impact

Thursday’s economic data painted a complex picture of the U.S. economy. The Producer Price Index (PPI) for April showed a surprising drop of 0.5%, the largest monthly decline since the early days of the COVID-19 pandemic in April 2020. On an annual basis, wholesale inflation slowed to 2.4%, in line with economists’ expectations.

Economists pointed to a 1.7% plunge in trade services, which measures gross margins for wholesalers and retailers, suggesting that companies are absorbing some of the costs from President Trump’s tariffs rather than passing them all to consumers.

Federal Reserve Chair Jerome Powell warned in a speech today that “inflation could be more volatile going forward” and that the economy may be “entering a period of more frequent, and potentially more persistent, supply shocks,” which could challenge the central bank’s policy decisions.

Retail Sales Cool After Strong March

April’s retail sales data came in at just 0.1% growth month-over-month, a significant slowdown from March’s upwardly revised 1.7% increase. When excluding auto sales, retail sales also rose 0.1%, down from 0.8% in March. The control number, which feeds into other economic data accounts, actually turned negative at -0.2%, suggesting consumers may be becoming more cautious with their spending.

Major Stock Movers

Several major stocks made significant moves on Thursday:

– Walmart (WMT) released its Q1 2026 earnings before market open, with investors closely watching how the retail giant is handling inflation pressures and tariff impacts. The company also faces a $222 million verdict in a trade secrets dispute with Zest Labs, though its stock had seen a 2% increase over the past month.

– Foot Locker (FL) shares surged more than 60% in after-hours trading on Wednesday after The Wall Street Journal reported that Dick’s Sporting Goods is closing in on a deal to buy the company for approximately $2.3 billion.

– UnitedHealth (UNH) slid 8% following reports that the Justice Department is investigating the insurer, though the company stated it had not been notified of any “supposed” investigation.

– Deere & Company (DE) reported earnings showing declines in sales, revenue, and net income compared to last year, but maintained its guidance for fiscal year 2025 with projected net income between $4.75 billion and $5.50 billion.

– Applied Materials (AMAT) is set to report its Q2 2025 earnings after market close today, with investors looking for insights into the semiconductor equipment sector.

– Tech giants continued to show strength this week, with Nvidia (NVDA) and Tesla (TSLA) both up more than 16% week-to-date, while Meta Platforms (META) added 11.3% in the same period.

US-China Trade Relations

Market sentiment has been bolstered by last weekend’s talks between Treasury Secretary Scott Bessent and Chinese officials, which resulted in a temporary suspension of reciprocal tariffs. This development has helped stave off immediate concerns about economic decline and inflation acceleration.

However, President Trump’s broader tariff policies are still expected to make many items more expensive in the coming months, potentially driving inflation higher according to economists.

Looking Ahead: Key Market Events

Investors will be closely watching several key events in the coming days:

1. Earnings season continues with more than 1,000 companies reporting today alone, including major players like Alibaba Group (BABA), NetEase (NTES), and Siemens AG (SIEGY).

2. Manufacturing data from regional surveys showed continued weakness, with the Empire State survey coming in at -9.2, marking the third straight month in negative territory, while the Philadelphia Fed survey improved to -4 from the previous month’s -26.

3. Fed policy outlook remains in focus as markets digest Powell’s comments about potentially more volatile inflation ahead and the challenges this presents for monetary policy.

4. Weekly jobless claims data released today will provide further insights into the labor market’s health.

As we move deeper into the second quarter of 2025, market participants remain cautious about the impact of trade policies, inflation trends, and corporate earnings growth. The recent market rally has shown resilience, but today’s pullback suggests investors are reassessing risks in light of the latest economic data and Fed commentary.