Market Indexes Close Higher Thursday Despite Trade Policy Concerns
The major U.S. stock indexes closed slightly higher on Thursday, May 29, 2025, as investors continued to navigate a volatile global trade landscape. The S&P 500 and tech-heavy Nasdaq Composite each gained 0.4%, while the Dow Jones Industrial Average added 0.3%.
The S&P 500 is currently on pace to record its biggest month of gains since late 2023, having risen 6.1% in May through Thursday’s close. Similarly, the Nasdaq Composite is up an impressive 9.9% this month. The Dow has gained a more modest 3.8% in May, which would still mark its best monthly performance since January.
Trade Policy Uncertainty Caps Market Gains
Market gains on Thursday were capped by ongoing uncertainty regarding U.S. trade policy. The U.S. Court of International Trade ruled on Wednesday night that President Trump had overstepped his authority when imposing his “reciprocal” tariffs. However, the Trump administration quickly filed a notice of appeal, and an appeals court reinstated the levies on Thursday afternoon.
“In general, markets don’t like uncertainty, because it makes forecasting more difficult,” said Larry Tentarelli, founder of the Blue Chip Daily Trend Report. “We expect the tariff news cycle to be an extended process, which can lead to higher short-term volatility.”
The Federal Reserve’s May meeting minutes, released earlier this week, revealed growing concerns about persistent inflation and the potential for stagflation, largely attributed to economic uncertainties stemming from Trump’s tariff policies. Officials highlighted that tariffs could simultaneously elevate inflation and suppress economic growth, complicating monetary policy decisions.
Upcoming Market Events for Friday, May 30
Investors will be closely watching several key economic data releases on Friday, May 30. The most significant will be the Personal Consumption Expenditures (PCE) index, the Federal Reserve’s preferred inflation gauge. Economists expect the core PCE price index to show a 0.1% month-over-month increase for April, following a flat reading in the previous month.
Other important economic indicators to be released include:
– Personal Income (expected: +0.3% month-over-month)
– Personal Spending (expected: +0.2% month-over-month)
On the earnings front, several companies are scheduled to report quarterly results before the market opens on Friday, including:
– Shoe Carnival, Inc. (SCVL), with analysts expecting earnings per share of $0.27
– Canopy Growth Corporation (CGC), with an expected EPS of -$0.10
Major Stock Movements and Corporate News
Nvidia (NVDA) continues to be in focus after reporting strong quarterly earnings on Wednesday, driven by a 73% year-over-year surge in its data center business.
Microsoft (MSFT) shares have surged 16% in May, putting them on track for their best month in more than three years. The rally has been fueled by better-than-expected results from its Azure cloud-computing business, which saw revenue growth of 33% in the most recent quarter. TD Cowen analysts project that AI-related Azure revenue will rise to about $24 billion in the 2026 fiscal year, from roughly $4 billion in fiscal 2024.
Apple (AAPL) has fallen behind its “Magnificent Seven” tech peers, with its share price down about 18% so far this year. Once the most valuable company in the world, Apple’s market cap now ranks third behind Microsoft and Nvidia. Analysts attribute this underperformance to Apple’s late entry into the AI race and its reliance on partnerships rather than breakthrough innovations.
Other notable stock movements include:
– Best Buy (BBY) dropped 7.3% after lowering its guidance to reflect expected tariff impacts
– Arista Networks (ANET) fell 6.9% following Nvidia’s announcement that Google parent Alphabet (GOOGL) and Facebook parent Meta Platforms (META) are new clients for Nvidia’s Ethernet network switches
– Edison International (EIX) and Carnival Corporation (CCL) fell 3.5% and 2.5% respectively on Wednesday
Market Outlook
Looking ahead, investors remain cautiously optimistic about the market’s trajectory. “I think as we head into summer that momentum can continue, [but] then that’s where the hard data that may catch up to the weaker, soft data, could come into play,” said Ned Davis Research chief U.S. strategist Ed Clissold. “I think as we move through the second quarter into the third quarter, there’s still some good momentum in the market.”
However, the ongoing uncertainty surrounding trade policy and its potential impact on inflation and economic growth continues to be a significant concern. The Federal Reserve’s cautious “wait-and-see” stance amid these economic ambiguities suggests that monetary policy decisions will remain highly data-dependent in the coming months.
As the market closes out a strong May, investors will be watching Friday’s PCE data closely for signs of inflation trends that could influence the Fed’s next moves.