By Panos Mourdoukoutas
U.S. stocks resumed gains during the trading week that began May 27, driven by Nvidia’s strong earnings, easing concerns in the bond market and over trade uncertainty, and a rebound in consumer confidence.
The S&P 500 Index closed May 30 at 5,911, up by 1.88 percent for the week. The Dow Jones Industrial Average gained 1.6 percent to finish at 42,270. The Nasdaq rose by 2.01 percent to 19,113, while the Russell 2000 posted smaller gains.
Equity market bulls had many things going their way on the morning of May 27, as Wall Street resumed trading after a long weekend with a broad advance. Among the positives was the easing of trade tensions between the United States and the EU, after Washington delayed imposing a 50 percent tariff on EU products.
The move helped ease investor fears that a trade conflict could weaken demand for tech shares, as the EU had threatened to impose similar tariffs on U.S. tech products. Semiconductor and software companies led a broad rally in the sector, erasing the previous week’s losses.
Meanwhile, news that Japan had scaled back its issuance of super-long-term bonds alleviated jitters in the global bond market, helping push bond prices higher and yields lower. The benchmark 10-year U.S. Treasury yield slipped from 4.48 percent to 4.42 percent.
The lower bond yields in turn softened fears of an impending economic slowdown, enabling economically sensitive sectors to rebound from the prior week’s losses.
These sectors received additional support from a broad rebound in the Conference Board’s May Consumer Confidence Index, suggesting that U.S. consumers will continue to drive economic growth.
“Consumer confidence improved in May after five consecutive months of decline,” Stephanie Guichard, senior economist for global indicators at The Conference Board, said in the report.
She said the rebound was already evident before the United States and China announced a trade deal on May 12, and that it gained strength afterward.
“The monthly improvement was largely driven by consumer expectations as all three components of the Expectations Index—business conditions, employment prospects, and future income—rose from their April lows,” Guichard said.
The broad rally in equities cooled on May 28 as bond yields reversed course, following a disappointing auction of Japanese super-long-term bonds and the release of Fed minutes that raised concerns about the economic impact of tariffs.
On May 29, trading turned choppy as a morning tech rally on the morning—sparked by Nvidia’s strong earnings report after the previous day’s market close—faded amid conflicting trade and economic headlines.
Still, market volatility eased over the week, with the Chicago Board Options Exchange Volatility Index dropping below 20, helping equity bulls maintain the upper hand.
Among the week’s winners was the tech sector, which benefited from easing trade tensions and improved earnings. Nvidia was up by 1.73 percent, Microsoft up by 1.21 percent, Broadcom up by 5 percent, and Palantir up by 7.76 percent.
The consumer discretionary sector also advanced, led by cruise and airline shares, as consumer confidence rebounded.
Meanwhile, U.S. Steel gained 25.45 percent after President Donald Trump suggested the previous week that Japan’s Nippon Steel would have “partial ownership” of the company.
Among the week’s losers were Salesforce, weighed down by investor concerns that it might be overpaying for the Informatica acquisition, and Gap, held down by worries about the impact of tariffs on its guidance for the rest of the fiscal year.
Looking ahead to the start of June, traders and investors will closely track the JOLTS Job Openings, ADP Employment, and non-farm Payroll reports to gauge the health of the nation’s labor market.
The Federal Reserve closely monitors these reports when setting the pace of monetary policy, which in turn influences the direction of short-term interest rates.
In reviewing the latest Fed minutes, David Russell, global head of market strategy at TradeStation, is optimistic that the nation’s central bank will become more accommodative toward equity markets, following some weakness in the housing and energy sectors that is expected to ease inflationary pressures.
“The Fed is keeping a tough stance for now, but housing and energy declines could help moderate inflationary pressures in coming months,” he told the Epoch Times.
“This could set investors up for a more positive second half if tariff stresses continue to ease. These minutes may represent peak hawkishness, so Goldilocks might make a comeback sooner than expected. A July rate cut could be on the table.”
Paul Stanley, chief investment officer of Granite Bay Wealth Management, expects the Fed to reconsider potential rate cut decisions in the fall, as it will want to wait and see how trade negotiations unfold over the coming months.
“The Fed may cut rates by 1-2 times in the final few months of 2025,” he told The Epoch Times.
