Market Surge Continues: S&P 500 Turns Positive for 2025 as Tech Stocks Lead Rally

Major Indexes Show Mixed Performance as Markets Digest US-China Trade Deal

The stock market showed mixed performance on Wednesday, May 14, 2025, as investors continued to digest the recent US-China trade agreement that has sparked a significant rally this week. The S&P 500 closed at 5,888.78, up 0.04% for the day, extending its winning streak and remaining in positive territory for the year. The tech-heavy Nasdaq Composite gained 0.57%, reaching 19,117.54 and marking its sixth consecutive positive session. Meanwhile, the Dow Jones Industrial Average fell slightly by 0.24% to 42,040.21, primarily weighed down by healthcare stocks.

The market’s positive momentum follows Monday’s announcement of a 90-day reduction in tariffs between the United States and China, which has significantly eased investor concerns about an escalating trade war. This development has been particularly beneficial for technology and growth stocks, many of which rely on China for production and components.

Tech Sector Leads Market Gains as Nvidia Surges

The technology sector continued to outperform on Wednesday, building on Tuesday’s 2% gain. Nvidia (NVDA) was among the standout performers, surging 5.63% to $129.86 after the semiconductor giant announced it would send more than 18,000 of its artificial intelligence chips to Saudi Arabia as part of a new partnership on AI initiatives. Other tech giants also performed well, with several building impressive winning streaks. Apple (AAPL) has risen for four consecutive sessions, while Amazon (AMZN) has posted gains for five straight trading days.

Healthcare Sector Drags Down Dow as UnitedHealth Plummets

The healthcare sector was the worst performer on Wednesday, declining 4.50%. UnitedHealth Group (UNH) was the biggest drag on the Dow Jones Industrial Average, plummeting 17.75% to $311.27 after the company suspended its earnings guidance and announced that CEO Andrew Witty would step down for personal reasons. Other healthcare stocks also struggled, with Merck & Co (MRK) falling 4.54% and Johnson & Johnson (J&J) dropping 3.55%.

Retail Sector Faces Challenges as American Eagle Withdraws Guidance

In the retail sector, American Eagle Outfitters saw its shares plunge nearly 15% in after-hours trading after withdrawing its full-year guidance and releasing disappointing preliminary results for the first quarter. The company expects to report a revenue decline of approximately 5% to $1.1 billion and an operating loss of $85 million, citing higher than planned promotional activity and inventory write-downs. This news also pressured shares of other retailers like Urban Outfitters and Abercrombie & Fitch in after-hours trading.

Upcoming Market Events to Watch

Investors are looking ahead to several significant earnings reports scheduled for Thursday, May 15. Retail giant Walmart (WMT) is set to report before the market opens at 9 AM EDT, while Chinese e-commerce leader Alibaba Group (BABA) will release its results at 8 AM EDT. These reports will provide important insights into consumer spending patterns and global economic conditions.

Technology earnings will also be in focus in the coming weeks, with Nvidia scheduled to report on May 28, potentially providing further catalyst for the market. Other notable upcoming earnings include Home Depot (HD) on May 19, Palo Alto Networks (PANW) on May 20, and Salesforce (CRM) on May 27.

Market Outlook: Risk-On Sentiment Prevails

The market’s recent performance reflects a significant shift toward risk-on sentiment following the easing of trade tensions. “It’s a big risk-on sentiment at the moment… While the structural issues between [the U.S. and China] remain unresolved, I think the signal is quite clear that neither side wants to push trade tensions further,” said Lale Akoner, global market analyst at eToro.

With inflation data showing a surprising cooldown in April and the S&P 500 turning positive for the year, investors appear increasingly optimistic about the market’s prospects heading into the summer months. However, all eyes will remain on upcoming earnings reports and any further developments in US-China trade relations.