S&P 500 rallies 2% as Wall Street's roller-coaster ride whips back
upward
[May 28, 2025] By
STAN CHOE
NEW YORK (AP) — Wall Street’s roller-coaster ride created by President
Donald Trump’s trade policies whipped back upward on Tuesday, this time
because of a delay for his tariffs on the European Union.
The S&P 500 leaped 2% in its first trading since Trump said Sunday that
the United States will delay a 50% tariff on goods coming from the
European Union until July 9 from June 1. The European Union’s chief
trade negotiator later said on Monday that he had “good calls” with
Trump officials and the EU was “fully committed” to reaching a trade
deal by July 9.
The Dow Jones Industrial Average jumped 740 points, or 1.8%, and the
Nasdaq composite rallied 2.5%. They more than recovered their losses
from Friday, when Wall Street’s roller coaster dropped after Trump
announced the tariffs on France, Germany and the other 25 countries
represented by the European Union.
Such talks give hopes that the United States can reach a deal with one
of its largest trading partners that would keep global commerce moving
and avoid a possible recession. Trump declared a similar pause on his
stiff tariffs for products coming from China earlier this month, which
launched an even bigger rally on Wall Street at the time.
“We focus on actions over words,” Jean Boivin and other strategists at
BlackRock Investment Institute said, “as economic constraints spur
policy rollbacks.”
Caution still remains on Wall Street, of course, even if the S&P 500 has
climbed back within 3.6% of its record after falling roughly 20% below
the mark last month.
A worry is that all the uncertainty caused by on-again-off-again tariffs
could damage the economy by pushing U.S. households and businesses to
freeze their spending and investments. Surveys have already shown U.S.
consumers are feeling worse about the economy’s prospects and where
inflation may be heading because of tariffs.
On Tuesday, though, optimism ruled. The stock market’s gains accelerated
after a report released by the Conference Board said confidence among
U.S. consumers improved by more in May than economists expected.
It was the first increase in six months, and consumers’ expectations for
income, business and the job market in the short term jumped sharply,
though it still remains below the level that typically signals a
recession ahead. About half the survey results came after Trump paused
some of his tariffs on China.
The rise in confidence was widespread, covering different age and income
groups, according to the Conference Board.
On Wall Street, Nvidia rallied 3.2% and was the strongest single force
driving the S&P 500 higher ahead of its profit report coming on
Wednesday. It’s the last to report this quarter among the “Magnificent
Seven” Big Tech companies that have grown so large that their stock
movements dominate the rest of the market.
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Dylan Halvorsan works on the floor of the New York Stock Exchange,
Tuesday, May 27, 2025. (AP Photo/Richard Drew)
Nvidia has been riding a tidal wave of growth created by the frenzy
around artificial-intelligence technology, but it is also facing
criticism that its stock price has shot too high.
Informatica climbed 6% after Salesforce said it would buy the AI-powered
cloud data management company in an all-stock deal valuing it at about
$8 billion. Salesforce rose 1.5%.
They were part of widespread gains across the U.S. stock market, where
93% of the stocks within the S&P 500 rose.
One of the outliers was AutoZone, which fell 3.7% following a mixed
report on its performance for the three months through May 10. Its
profit fell short of analysts’ expectations, though its growth in
revenue was stronger than expected.
CEO Phil Daniele said both its DIY and commercial businesses did well
domestically, but shifting moves in foreign-currency values put pressure
on the retailer’s operations outside the United States.
All told, the S&P 500 rose 118.72 points to 5,921.54. The Dow Jones
Industrial Average added 740.58 to 42,343.65, and the Nasdaq composite
gained 461.96 to 19,199.16.
In the bond market, Treasury yields eased to take some of the pressure
off the stock market. The yield on the 10-year Treasury fell to 4.44%
from 4.51% late Friday. It had been rising last week, in part because of
worries about the U.S. government’s rapidly increasing debt.
Yields had been climbing for bond markets around the developed world,
particularly in Japan, where a recent auction of longer-term bonds found
relatively few buyers. But analysts said worries eased a bit after
Japan’s finance ministry sent a questionnaire to bond investors that
they took as a signal of efforts to calm the market.
In stock markets abroad, European indexes mostly rose, while Asian
indexes were mixed.
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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.
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