Wall Street Weekly Wrap: Markets Rally on U.S.-China Trade Truce and Cooling Inflation
May 17, 2025 — New York
U.S. stocks ended the week with strong momentum, driven by a 90-day tariff pause between the U.S. and China, coupled with signs of cooling inflation and solid global economic data.
The S&P 500 jumped 5% this week, nearing record territory, while the MSCI World Index gained 4%, signaling a synchronized global equity rebound.
Major Index Performance (5-Day)
Index | Weekly Change | Notes |
---|---|---|
S&P 500 | 📈 +5.0% | Near all-time high, tech and industrials led |
MSCI World Index | 📈 +4.0% | Global rally across developed markets |
Dow Jones | 📈 +3.2% | Strength in consumer and financial stocks |
Nasdaq Composite | 📈 +4.8% | Led by AI and semiconductor names |
Key Market Drivers
U.S.-China Trade Truce Sparks Global Rally
A diplomatic breakthrough between Washington and Beijing led to a 90-day suspension of new tariffs, calming investor fears about global supply chains and recession risks. The tech, industrial, and export sectors soared in response.
Cooling Inflation Lifts Fed Hopes
The latest CPI data showed inflation easing more than expected, with consumer prices up just 0.2% month-over-month, improving chances of a Federal Reserve rate cut by Q3 2025.
Strong Global Sentiment
Global investors responded positively to the dual impact of improved trade relations and lower inflation. The MSCI World Index, which tracks 1,600+ large and mid-cap stocks globally, reflected renewed investor confidence across Europe, Japan, and the U.S.
Wall Street Highlights
-
Tech Stocks Rally: Nvidia, Palantir, and Apple all posted strong weekly gains, pushing the Nasdaq higher.
-
Financials Recover: JPMorgan and Goldman Sachs rose on improving bond yields and reduced rate hike risks.
-
Industrial Surge: Caterpillar and GE jumped as global manufacturing sentiment rebounded.
Global Market Snapshot
Region | Weekly Change | Highlights |
---|---|---|
Europe (FTSE, DAX) | 📈 +2.7% | Boost from U.S.-China deal, lower eurozone inflation |
Asia (Nikkei, Hang Seng) | 📈 +3.9% | Led by tech rebound and China stimulus hopes |
Emerging Markets | 📈 +2.5% | Gains in Brazil, India, and Southeast Asia |
Investor Outlook
Wall Street enters the next week with cautious optimism. While macro headwinds remain, the momentum from improved trade diplomacy and inflation relief has set the tone for a potential extended summer rally.
Key events to watch next week:
-
Federal Reserve’s May minutes
-
Nvidia and Walmart earnings reports
-
China’s industrial output data
Wall Street today, US stock market news, S&P 500 up 5%, MSCI World Index rally, US-China trade truce news, global stock market gains, Dow Jones weekly update, Nasdaq performance May 2025, inflation impact on stocks, Fed interest rate forecast 2025