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.
Meanwhile, the Dow Jones Industrial Average bucked the trend, falling 0.64% to 42,140.43, weighed down significantly by healthcare giant UnitedHealth Group.
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%.
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.
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.
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%.
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.
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.
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.