Market Recap: S&P 500 Pulls Back After Six-Day Rally as Tariff Concerns Linger
Major Indexes Retreat as Market Rally Pauses
The U.S. stock market took a breather on Tuesday, May 20, 2025, as investors reassessed whether the recent rally has outpaced economic fundamentals. The S&P 500 slipped 0.2% to 5,959.38, snapping a six-day winning streak that had brought the benchmark index within 3% of its all-time high.
Today’s pullback comes after Monday’s session where the S&P 500 closed on the brink of a bull market following six consecutive days of gains. Despite today’s decline, the major indexes remain in positive territory for 2025, with the S&P 500 up 1.3% and the Dow up 0.3% year-to-date.
Tariff Risks and Economic Concerns Weigh on Sentiment
Market sentiment was dampened by lingering concerns over potential trade tensions and sticky inflation. Investors continue to monitor the impact of tariffs on the economy amid worries about a possible U.S. recession. This cautious outlook persists despite the market largely shrugging off Moody’s recent downgrade of the U.S. government’s credit rating.
The dollar’s weakness continued today, dropping 0.1%, while gold fell slightly. Treasury yields remained elevated following their spike after Moody’s downgrade, with the benchmark 10-Year U.S. Treasury Note yield hovering around 4.5%.
Ryan Detrick, chief market strategist at Carson Group, remains optimistic about the market’s trajectory: “All these worries and concerns are real. We’re not ignoring everything that’s out there. But are we listening to what the market’s doing? The previous 27 trading days, the S&P 500 is up close to 20%. That’s not a bear market rally. That’s not a short-covering rally.”
Notable Stock Movers
Several individual stocks made significant moves today:
– **Novavax Inc. (NVAX)** surged 15% after receiving long-awaited FDA approval for its COVID-19 vaccine.
– **Regeneron Pharmaceuticals, Inc. (REGN)** edged up 0.4% following its decision to acquire genomics firm 23andMe Holdings for $256 million through a bankruptcy auction.
– **Ryanair Holdings plc (RYAAY)** climbed 7.9% after reporting a narrower-than-expected quarterly loss.
– **ZIM Integrated Shipping Services Ltd. (ZIM)** jumped 5.7% after beating earnings expectations with Q1 adjusted EPS of $2.45, well above the $1.49 consensus estimate.
– **Nvidia Corporation (NVDA)** inched up 0.13% to $135.57, continuing to lead the tech sector’s outperformance in May.
– **Tesla, Inc. (TSLA)** fell 2.25% to $342.09 amid the broader market pullback.
Upcoming Market Events
Investors are closely watching several key economic events that could impact market direction in the coming days:
1. **Home Depot (HD)** earnings report, released this morning, providing insights into consumer spending and the housing market.
2. **Toll Brothers (TOL)** quarterly report, expected after market close today, offering additional perspective on the housing sector.
3. **Fed Chair Powell’s speech** scheduled for later this week, which may provide clues about the Federal Reserve’s monetary policy outlook.
4. **E-Commerce Retail Sales** data release, offering insights into consumer spending trends.
5. **Australian Central Bank (RBA) Interest Rate Decision** announced today, with rates cut to 3.85% from 4.1%, potentially signaling a global shift in monetary policy.
Market Outlook
As the S&P 500 hovers just 3% below its all-time high, market participants remain divided on whether the recent rally can sustain momentum. While economic concerns persist, strong corporate earnings have kept bulls in charge. The coming days will be crucial as investors digest more earnings reports and economic data to determine if the market can resume its upward trajectory or if a more significant pullback is warranted.
Traders should monitor upcoming Fed speeches and economic indicators for further direction, particularly as concerns about tariffs and inflation continue to influence market sentiment.
