Monday, May 12, 2025
Markets posted one of its strongest sessions of 2025 so far. We’ve had a volatile first half of the year, and we might expect that volatility to continue. But with all the ups and downs, today’s big day into the green has brought the S&P 500 within 5% of its all-time trading high. The Dow and S&P 500 are within 1% of posting profits year to date.
The Dow shot up 1160 points today, for a +2.81% gain — and it was the laggard among the major indexes. The S&P 500 grew +184 points, +3.26%. The Nasdaq, which one the day on strength in tech stocks, was up a whopping +779 points, +4.35%. The small-cap Russell 2000 gained +68 points, +3.40%.
Of course, the catalyst for this seismic shift comes from the agreement between the U.S. and China to pause their reciprocal tariffs (which had ballooned to +145% on Chinese imports to the U.S. and +125% on U.S. exports to China). Amazon AMZN and Meta Platforms META were both up +8% today, leading the way for “Mag 7” stocks.
Chinese stocks also saw a bounce today, with Hong Kong’s Hang Seng index gaining +3% today, for its best trading day since March. Meanwhile, the U.S. Dollar is back up to its one-month high, and Gold — which had been a demonstrative hedge when the equities market was melting away, just a few short weeks ago — is down -3% today.
What to Expect from the Stock Market Tomorrow
The big news tomorrow — though unlikely to make as big a splash as this tariff pause did today — is the
Consumer Price Index (CPI) report for April. Headline month over month CPI is expected to provide the biggest swing: +0.2% versus -0.1% reported a month ago, +0.3% on core versus +0.1% for March. Year over year, headline is expected to remain steady at +2.4%, and steady at +2.8% on core year over year.
These figures, should they come in as expected, would still be notably above the optimal levels the Fed targets for inflation. Market strength and an absence of economic troubles that harsh tariff policies set in motion will likely keep any interest rate cuts at bay for now anyway, with the probability of a June rate cut tumbling from 64.4% to 8.1% today. The highest probability for the first cut of 2025 is currently the September meeting.
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Amazon.com, Inc. (AMZN): Free Stock Analysis Report Meta Platforms, Inc. (META): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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