Why American Express Stock Jumped Today

Shares of American Express (NYSE: AXP) jumped on Tuesday. The company's stock rose 3% by the time the market closed. The move up comes as the S&P 500 (SNPINDEX: ^GSPC) jumped 2% and the Nasdaq Composite (NASDAQINDEX: ^IXIC) jumped 2.5%.

Shares of the credit card giant jumped after May's consumer confidence report showed consumers' attitudes were much rosier than expected.

A positive report

Released today, the Conference Board's Consumer Confidence Index for May showed sentiment has reversed course. The 98 rating was up from April's 85.7 and is the first time the index ticked up in months after President Trump hit pause on a global trade war.

Stephanie Guichard, senior economist, Global Indicators at The Conference Board, said:

Consumer confidence improved in May after five consecutive months of decline. The rebound was already visible before the May 12 U.S.-China trade deal, but gained momentum afterwards. 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.

Image source: Getty Images.

Amex is inflation-resistant

The news that consumer confidence was up helped boost American Express stock, as the company is heavily dependent on consumer spending habits. The company, a longtime favorite of Warren Buffett, is a solid pick among the competition. As both a bank and a payment network, its vertical integration provides it certain advantages, and unlike the companies actually producing or selling products to consumers, its margins aren't pressured by inflation.

Of course, the real threat is a major slowdown of consumer spending, but if that happens, there are few companies that would be untouched.

Should you invest $1,000 in American Express right now?

Before you buy stock in American Express, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and American Express wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $639,271!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $804,688!*

Now, it’s worth noting Stock Advisor’s total average return is 957% — a market-crushing outperformance compared to 167% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of May 19, 2025

American Express is an advertising partner of Motley Fool Money. Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.