May 16, 2025

The DJIA joined the S&P 500 trading positive for 2025 today as the major averages finished off a strong week brought on by better visibility on tariffs and trade. The different indexes opened higher on mixed housing data but fell back after the University of Michigan Consumer Confidence Index fell to 50.8, its lowest mark since June 1952, from 52.2 the prior month, with one-year inflation expectations jumping to +7.3%, the highest since 1981. Equities were able to shake off the reading as investors cheered news from Trump's Mideast trade deals sending the different indexes higher. Every sector except Energy (XLE) closed in the plus column with Healthcare (XLV) rebounding on an upgrade of UnitedHealth Group (UNH), which jumped +6.18% after an oversold upgrade. Utilities (XLU), REITs (XLRE), Consumer Staples (XLP) and Industrial (XLI) also outperformed gaining more than +1%. The major averages closed at the highs of the day with the DJIA up 331.99 points (+0.78%) at 42654.74. The S&P 500 added 41.45 points (+0.70%) and settled at 5958.38, while the NASDAQ tacked on 98.78 points (+0.52%) finishing at 19211.10.

Breadth was positive with advancing issues beating declining issues 2.3:1 on the NYSE and almost 2:1 on the NASDAQ. Volume was above average on options expiration with advancing volume 77% on the NYSE and 71% of the NASDAQ. The VIX slipped 0.59 (-3.31%) and closed at 17.24. Crude oil prices added 0.73 (+1.18%) and the June contract closed at $62.35 a barrel. Gold prices dropped 30.60 (-0.95%) and finished at $3196.00 an ounce. Bitcoin (BTC) closed the session at $103,940.

The major averages may have new highs in sight as news on tariffs and trade removes some of the uncertainty surrounding the market after Trump's 'Liberation Day' announcement. Investor sentiment is rotating to the bullish side and market participants likely have plenty of cash on the side to fuel more gains after the V-shaped recovery. Next week Q1 earnings will be grinding to a halt and could allow the major averages to consolidate some of the gains from the recent rally as the market is overbought with stochastics in upper 90's.

Earnings releases to watch for on Monday include: Ryanair Holdings (RYAAY), ZIM Integrated shipping (ZIM), Trip.com (TCOM) and Agilsys (AGYS).

Monday's Market Moving Economic Calendar: E-commerce Retail Sales and Leading Indicators.

By David L. Blake, CMT