Market Thaw and Tariff Jitters

Fresh news and strategies for traders. SPY Trader episode #1172. Hey everyone, it's your pal Finny McFinance here, and welcome to Spy Trader! It's 6 am on Saturday, May 17th, 2025, Pacific Time, and let's dive into what happened in the market this week. First off, the market had a pretty solid week. The Nasdaq really took off, up 7.2%! The S&P 500 followed with a 5.3% jump, and even the Dow managed a respectable 3.4% increase. On Friday, the party continued with the Dow up 0.8%, the S&P 500 up 0.7%, and the Nasdaq climbing 0.5%. So, what fueled this market joyride? A big part of it was the US and China agreeing to chill out on tariffs for 90 days while they try to hash out a bigger trade deal. That definitely put investors in a good mood. However, there were some whispers later in the week about new tariff rates that kinda spooked folks a bit on Friday. Looking at different sectors, tech and consumer discretionary stocks were the cool kids this week, leading the charge. Healthcare and real estate, not so much. Defensive sectors like utilities and consumer staples saw some buying as people looked for safer harbors. On the macro front, the US economy seems to be holding its own. Inflation isn't quite as scary as it was, with the April CPI rising a bit less than expected, at 2.3% yearoveryear. Even the Producer Price Index surprised everyone by actually going down! One slightly worrying sign, though, is that consumer sentiment has been dropping for five months straight, hitting its lowest point since 2022. People are getting a bit worried about inflation expectations and trade policies, which is understandable. Companywise, UnitedHealth Group had a wild ride. The stock tanked on Thursday after reports of a DOJ investigation but then bounced back big time on Friday, soaring over 6%. Megacap tech stocks had mixed results. Tesla zoomed up 2%, and Alphabet was up around 1%. However, Apple and Meta Platforms took a small dip. Chipmaker Broadcom took a hit, falling nearly 2%. AMD was on cloud nine after announcing a $6 billion share buyback, but Applied Materials went down despite good earnings. Okay, so here's my take. The trade deal thaw with China is a big win for the market. Easing inflation is also helping. But, those tariff worries are still lurking, and declining consumer sentiment is something to keep an eye on. So, what do I recommend? Diversify, my friends, diversify! Rebalancing your portfolio is always a good idea to handle market swings. I'd lean a bit more towards stocks than bonds and maybe focus on US large and midcap stocks. And remember, don't panic! Stick to your strategy and try not to make rash decisions based on shortterm market craziness. That's all for today's Spy Trader. Stay tuned for more financial fun, and remember, keep those portfolios diversified and your spirits high! Finny out!