Market Surge: S&P 500 Erases 2025 Losses as Tech Stocks Lead Rally

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Market Indexes Turn Positive Amid Trade Truce and Cooling Inflation

The U.S. stock market showed mixed results on Wednesday, May 14, 2025, with the S&P 500 continuing its impressive recovery by rising 0.72% to close at 5,886.55, officially erasing all its losses for the year. This remarkable turnaround comes just over a month after the index had plunged to 2025 lows amid President Trump’s tariff announcements. The tech-heavy Nasdaq Composite outperformed other indexes, climbing 1.61% to 19,010.08, marking its fifth consecutive positive session.

Meanwhile, the Dow Jones Industrial Average bucked the trend, falling 0.64% to 42,140.43, weighed down significantly by healthcare giant UnitedHealth Group. Despite today’s decline, the Dow remains up 6.91% over the past year.

Trade Truce and Inflation Data Fuel Market Optimism

The market’s positive momentum stems from two key developments. First, the United States and China announced a 90-day reduction in tariffs on Monday, with the U.S. slashing tariffs to 30% from 145% on Chinese imports, while China cut tariffs on U.S. imports to 10% from 125%. This trade truce has significantly reduced market uncertainty and boosted investor confidence.

Second, fresh data released Tuesday showed cooling inflation, with the Consumer Price Index (CPI) rising just 2.3% from year-ago levels—the lowest rate since February 2021. Core CPI, which excludes volatile food and energy prices, grew 2.8% year-over-year, in line with analysts’ expectations. This softer-than-expected inflation reading has fueled optimism that the Federal Reserve might implement two 25-basis-point rate cuts later this year, with the first potentially coming in September.

Tech Stocks Lead the Rally as Nvidia Crosses $3 Trillion Mark

Technology stocks were the standout performers on Wednesday, with the sector rising more than 15% on the S&P 500. Nvidia Corporation (NVDA) led the charge, surging 5.61% after announcing it would send 18,000 of its advanced AI chips to Saudi Arabia. The chip giant once again crossed the $3 trillion market capitalization threshold during Tuesday’s trading session.

Other tech giants also posted strong gains, with Micron Technology (MU) up 5.05%, Broadcom Inc. (AVGO) rising 4.97%, and Tesla (TSLA) climbing 4.94%. Meta Platforms (META) added nearly 3% as the “Magnificent 7” megacaps continued their impressive rally.

UnitedHealth Drags Down Dow as CEO Steps Down

The biggest negative impact on Wednesday’s market came from UnitedHealth Group (UNH), which plummeted 17.75% after the company suspended its 2025 guidance and announced the immediate resignation of CEO Andrew Witty for personal reasons. Bank of America downgraded UnitedHealth to neutral from buy, citing concerns about Medicare Advantage uncertainty.

Other notable decliners included Merck & Co. (MRK), down 4.54%, Johnson & Johnson (JNJ), falling 3.55%, and American Eagle Outfitters (AEO), which tumbled nearly 15% after withdrawing its full-year guidance and reporting disappointing preliminary first-quarter results.

Key Earnings and Economic Events to Watch

Investors should keep an eye on several important earnings releases scheduled for Thursday, May 15, 2025. Retail giant Walmart (WMT) and Chinese e-commerce leader Alibaba Group (BABA) are both set to report before the market opens. Applied Materials (AMAT) and Take-Two Interactive Software (TTWO) will report after market close.

Looking ahead to next week, notable companies reporting include The Home Depot (HD) and Palo Alto Networks (PANW) on Monday, followed by Baidu (BIDU), Medtronic (MDT), and XPeng (XPEV) on Tuesday.

Market Outlook

With the S&P 500 now in positive territory for the year and inflation showing signs of cooling, market sentiment has improved significantly. However, analysts caution that the full impact of tariffs may not be felt for some time, and companies like Honda (HMC) have already warned of potential profit hits from Trump’s new auto duties.

As we move forward, investors will be closely monitoring upcoming earnings reports and economic data for further clues about the market’s direction, with particular attention to the Federal Reserve’s potential rate cuts later this year.