Track Markets Live NowMarket Indexes Pull Back After Record-Setting Rally
The stock market is showing signs of cooling off on Monday, May 5, 2025, following what has been a remarkable winning streak for major indexes. U.S. stock futures dipped in early trading, suggesting Wall Street may snap its impressive run that saw the S&P 500 log nine consecutive days of gains—its longest winning streak since November 2004.
As of Monday morning, futures tied to the S&P 500 were down approximately 0.6%, while Dow Jones Industrial Average futures declined 0.5% and Nasdaq-100 futures fell 0.6%.
Why Is the Market Up? Trade Optimism Fueled Recent Rally
The market’s recent strength has been largely attributed to increasing hopes for a U.S. trade deal with major trading partners. Chinese authorities have indicated they’re evaluating the possibility of starting trade negotiations with the U.S., and a report by The Wall Street Journal suggested that Beijing is open to trade talks.
However, some analysts remain cautious about the sustainability of the rally. Ryan Dykmans, chief investment officer at Dunham & Associates Investment Counsel, noted: “We do see this run up as being more based on excitement than actual, solid—not just fundamentals, but an actual change.”
Federal Reserve Meeting Takes Center Stage This Week
The Federal Open Market Committee (FOMC) begins its two-day policy meeting on Tuesday, May 6, with the interest rate decision and Fed Chair Jerome Powell’s press conference scheduled for Wednesday afternoon. Market participants will be watching closely for any signals about future monetary policy, though the probability of a rate cut at this meeting is extremely low at just 3.2%, according to the CME Group’s FedWatch tool.
The Fed is widely expected to maintain the target range for the federal funds rate at 4.25% to 4.50%.
Powell’s press conference will be particularly noteworthy as he faces increasing political pressure from President Trump, who recently called Powell a “major loser” and claimed to know “much more than he does about interest rates.”
Major Stock Movers: Tech Giants and Market Leaders
Among the “Magnificent Seven” stocks that have significant influence on market indexes, performance has been mixed. Meta Platforms (META) led the group with a 4.34% gain on Friday, while Nvidia (NVDA) rose 2.59% and Tesla (TSLA) climbed 2.38%.
Microsoft (MSFT) advanced 2.32%, continuing its recovery after beating Wall Street’s targets for its fiscal third quarter and guiding above views for the current period. The company earned $3.46 a share on sales of $70.07 billion in the quarter ended March 31, exceeding analyst expectations.
In contrast, Apple (AAPL) tumbled 3.74% following its earnings report.
Other notable movers included Palantir Technologies (PLTR), which gained 6.95% ahead of its earnings report scheduled for Monday after market close.
Upcoming Earnings and Economic Data to Watch
This week brings a busy calendar of corporate earnings and economic data that could further influence market direction:
– **Monday, May 5**: Palantir (PLTR), Vertex Pharmaceuticals (VRTX), Ford (F), Tyson Foods (TSN), Clorox (CLX), and Onsemi (ON) report earnings
– **Tuesday, May 6**: U.S. trade deficit data for March; Advanced Micro Devices (AMD), Ferrari (RACE), Arista Networks (ANET), and Electronic Arts (EA) report earnings
– **Wednesday, May 7**: FOMC interest rate decision; Novo Nordisk (NVO), Uber Technologies (UBER), Walt Disney (DIS), Arm Holdings (ARM), and DoorDash (DASH) report earnings
– **Thursday, May 8**: Weekly jobless claims, U.S. productivity data for Q1, and wholesale inventories for March; Shopify (SHOP), ConocoPhillips (COP), and Coinbase (COIN) report earnings
– **Friday, May 9**: Multiple Fed officials are scheduled to speak, including Governors Lisa Cook and Christopher Waller, New York Fed President John Williams, and others
Oil Prices Tumble as OPEC+ Increases Production
In commodities news, U.S. crude oil futures fell more than 4% on Sunday after OPEC+ agreed to increase production for a second consecutive month. The group, led by Saudi Arabia, will boost output by another 411,000 barrels per day in June, following a similar increase in May.
U.S. crude was down $2.49, or 4.27%, to $55.80 a barrel shortly after trading opened, while global benchmark Brent fell $2.39, or 3.9%, to $58.90 per barrel. Oil prices have fallen more than 20% this year.
Market Outlook: What Investors Should Watch
As the market navigates this week’s events, investors should keep a close eye on several key factors:
1. **Fed commentary**: Powell’s press conference on Wednesday could provide crucial insights into the central bank’s thinking on inflation, employment, and future rate decisions.
2. **Trade developments**: Any concrete announcements regarding U.S.-China trade negotiations could significantly impact market sentiment.
3. **Earnings surprises**: With several major companies reporting this week, unexpected results could drive individual stock movements and broader market trends.
4. **Economic indicators**: Data on trade, productivity, and jobless claims will help investors gauge the health of the economy amid ongoing concerns about inflation and growth.
The market’s recent rally has brought the S&P 500 back to pre-tariff announcement levels, but whether this momentum can continue will likely depend on this week’s developments in monetary policy, corporate earnings, and trade relations.