Wall Street drifts back within 4% of its record after the S&P 500
notches a 4th straight gain
[May 16, 2025] By
STAN CHOE
NEW YORK (AP) — Most U.S. stocks drifted higher in quiet trading
Thursday following a jumble of mixedreports that offered little clarity
on how the U.S. economy is managing through President Donald Trump’s
trade war.
The S&P 500 rose 0.4%, enough to extend its winning streak to a fourth
day and to pull within 3.7% of its all-time high set earlier this year.
The Dow Jones Industrial Average added 271 points, or 0.6%, and the
Nasdaq composite slipped 0.2%.
Stocks got a lift from easing Treasury yields in the bond market. They
fell after the economic reports suggested the Federal Reserve may have
more room to cut interest rates later this year to bolster the U.S.
economy if it weakens under the weight of high tariffs.
But the reports did little to spell out whether the economy is falling
toward a recession, as many investors had been fearing, or shaking off
the uncertainty after Trump called off many of his tariffs temporarily.
The headliner reports said shoppers spent less at U.S. retailers last
month than expected, while inflation was better at the wholesale level
than economists forecast. Other updates said U.S. manufacturing looks
like it’s still contracting but fewer U.S. workers are applying for
unemployment benefits than expected.
Even though China and the United States recently agreed on a 90-day
stand-down for many of their tariffs, “the trade story isn’t over, and
it’s still going to take time for tariffs to make themselves felt in
economic data,” according to Ellen Zentner, chief economic strategist
for Morgan Stanley Wealth Management.
Such uncertainty showed itself in Walmart’s stock, which slipped 0.5%
even though it reported a bigger profit for the latest quarter than
analysts expected.
Like other U.S. companies struggling through Trump’s on-again-off-again
rollout of tariffs, Walmart said it decided not to offer a forecast for
how much profit it will make in the current quarter.
Chief Financial Officer John David Rainey pointed to “the range of
near-term outcomes being exceedingly wide and difficult to predict,”
though the company did say it expects sales to grow between 3.5% and
4.5%, not including the swings that shifting values of foreign
currencies can bring.
The nation’s largest retailer also said that it must raise prices due to
higher costs caused by Trump’s tariffs.
Equipment maker Deere said it’s seeing “near-term market challenges” and
called the situation “dynamic,” as many other companies have. It lowered
the bottom end of its forecasted range of profit for the full year. But
Deere's stock nevertheless rose 3.8% after it reported a stronger profit
for the latest quarter than analysts expected.
Cisco Systems was another winner and rose 4.8% after the tech giant
likewise topped expectations for profit. Analysts said they’re
optimistic about Cisco’s artificial-intelligence prospects.
Elsewhere on Wall Street, Dick’s Sporting Goods tumbled 14.6% after it
said it would buy the struggling Foot Locker chain for $2.4 billion.
Dick’s also said that it made a better profit for the latest quarter
than analysts expected.
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Trader William Lawrence works on the floor of the New York Stock
Exchange, Wednesday, May 14, 2025. (AP Photo/Richard Drew)
 Foot Locker soared 85.7% after
coming into the day with a loss of nearly 41% for the year so far.
All told, the S&P 500 rose 24.35 points to 5,916.93. The Dow Jones
Industrial Average added 271.69 to 42,322.75, and the Nasdaq
composite fell 34.49 to 19,112.32.
In the oil market, crude prices sank roughly 2% on expectations that
more petroleum could be set to flow into global markets because of a
possible deal between the United States and Iran over that country’s
nuclear program. Such a deal could help ease sanctions against Iran,
which is a major producer of oil.
Elsewhere, China moved to reverse some of its “non-tariff” measures
against the U.S. as agreed with Washington in their temporary trade
war truce, while demanding that the U.S. side “immediately correct
its wrong practices.”
A Chinese Commerce Ministry spokesperson accused the Trump
administration of violating world trade rules by announcing that use
of Ascend computer chips made by China’s Huawei Technologies
violates U.S. export controls.
Stock indexes fell 0.8% in Hong Kong and 0.7% in Shanghai, while
indexes were mixed elsewhere in Asia and Europe.
In the bond market, the yield on the 10-year Treasury fell to 4.44%
from 4.53% late Wednesday. Falling bond yields can encourage
investors to pay higher prices for stocks and other investments.
The two-year Treasury yield, which more closely tracks expectations
for Fed action, dropped to 3.96% from 4.05% as traders built bets
that the Fed will resume cutting its main interest rate as soon as
September.
The Fed has been keeping its main interest rate on hold this year as
it waits to see how Trump’s trade policies play out for the economy.
Cutting rates would juice the economy by making it easier for U.S.
households and companies to borrow and spend. But it would also push
upward on inflation when worries are high that Trump’s tariffs will
do the same thing.
Fed Chair Jerome Powell warned in a speech on Thursday that the
world “may be entering a period of more frequent, and potentially
more persistent, supply shocks” that could goose inflation higher
and present a “difficult challenge for the economy and for central
banks.”
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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.
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