U.S. Stocks Rally on Trade Truce Despite Consumer Sentiment Dip: May 16, 2025
Markets Climb on Trade Optimism
U.S. stock markets closed higher on Friday, May 16, 2025, extending weekly gains sparked by a 90-day pause in the U.S.-China trade war announced earlier in the week. The Dow Jones Industrial Average rose 0.75%, the S&P 500 climbed 0.7%, and the Nasdaq Composite added 0.5%, reflecting investor enthusiasm for de-escalating trade tensions. The rally built on Monday’s surge, the S&P 500’s 2.4% jump that day. Despite a brief dip early Friday, markets shrugged off economic headwinds, signaling confidence in trade progress.
Consumer Sentiment Hits Near-Record Low
A University of Michigan survey revealed consumer sentiment plummeted to its second-lowest level ever, with one-year inflation expectations surging to 7.3% from 6.5%. This downbeat data initially rattled investors, but markets quickly recovered. Melissa Brown, a managing director at Simcorp, expressed surprise at the resilience, suggesting that weeks of positive tariff news have given stocks momentum, overshadowing concerns about consumer pessimism and inflation fears.
Key Stock Movements
UnitedHealth Group (UNH) soared 6.5% to $291.91, rebounding from eight days of steep losses as investors anticipated strategic shifts amid a Justice Department criminal probe. In contrast, Applied Materials (AMAT) fell 5% to $165.57 after missing second-quarter revenue estimates, weighing on chip stocks. Charter Communications (CHTR) gained 2% to $427.25 following its $22 billion acquisition of Cox Communications, bolstering its cable market presence. Verizon Communications (VZ) rose 1.7% to $43.99 after the FCC approved its $20 billion purchase of Frontier Communications, contingent on ending diversity, equity, and inclusion programs.
What’s Next for Markets?
The trade truce and corporate developments have fueled market optimism, but consumer sentiment and inflation concerns linger. Will U.S. stocks sustain their gains? . Stay tuned for updates on this dynamic market!
The news is verified by Reuters, Yahoo Finance, The Globe and Mail, and Gazette.
