Weekly Market Summary: Market Rally, Trade Tensions and Commodities

Weekly Market Summary: Market Rally, Trade Tensions and Commodities

Wall Street Ends May with Its Best Performance in Six Months

In May 2025, U.S. stock markets delivered outstanding performance, driven by positive economic data, strong tech sector results, and temporary relief in trade tensions.

• S&P 500 closed the month with a 6.2% gain. Ended May at 5,911.69 points, nearly flat in the final session.
• Nasdaq Composite soared 9.6%, marking its best month since November 2023,  finished at 19,113.77 points.
• Dow Jones Industrial Average posted a 3.9% increase, extending a sustained upward trend, closed at 42,270.07 points, gaining 54.34 points on Friday.

Key Drivers Behind the Market Rally

Several factors contributed to the robust monthly performance:

• Strong corporate earnings, especially among tech firms.
• A temporary pause on new tariffs by the U.S. government against the European Union.
• Investor optimism surrounding a potential long-term trade deal between the U.S. and the U.K.
• Improved consumer confidence and solid sales in key sectors.

The Impact of Nvidia and Other Tech Stocks

One of the key catalysts of the rally was Nvidia’s (NVDA) impressive earnings report, which far exceeded market expectations, fueled by strong demand for AI infrastructure. This news lifted the entire tech sector, positively impacting companies such as Dell Technology (DELL), Zscaler (ZS), and Synopsys (SNPS).

Renewed U.S.-China Tensions Rekindle Market Uncertainty

Despite the positive momentum in markets during May, trade relations between the United States and China once again cast a shadow over investor sentiment. Statements by President Donald Trump and new regulatory signals reignited fears of a revived trade war, particularly affecting sensitive sectors like technology and commodities.

Trump’s Statements and Trade Actions

On May 30, Trump publicly accused China of violating a preliminary trade agreement. He also used his Truth Social platform to warn of new tariffs if Beijing failed to honor previously agreed terms. These statements triggered a sharp market drop, although losses eased by the end of the session.

Simultaneously, reports emerged that the U.S. administration plans to expand restrictions on Chinese tech firms, potentially affecting the export of software and semiconductor-related components.

Legal Reactions and Court Appeals

U.S. tariff policy also saw contradictory legal developments. A trade court initially blocked Trump’s tariffs, ruling he had overstepped his executive authority. However, a federal appeals court overturned that decision the following day, temporarily reinstating the tariffs while legal proceedings continue.

The administration has considered invoking Section 122 of the Trade Act of 1974, which would allow the imposition of emergency tariffs for up to 150 days in cases of significant trade imbalance.

Market Impact and Future Expectations

These developments rekindled uncertainty among investors. While the market maintained a bullish trend throughout the month, ongoing trade disputes remain a key source of volatility. Analysts widely agree that the lack of a structural trade deal with China, combined with unresolved legal challenges, could threaten market stability in the near and medium term.

Europe and Asia: Macroeconomic Data and Relative Stability

While global investors closely monitor developments between the United States and China, European and Asian markets showed signs of moderate stability, supported by economic data pointing to controlled inflation and steady, if modest, regional growth.

Inflation in Germany and the Eurozone

In Germany, Europe’s largest economy, year-over-year inflation in May stood at 2.1%, slightly lower than April’s 2.2%, but above analysts’ expectations of 2.0%. This figure, published by the Federal Statistical Office, suggests that prices are gradually easing, though at a slower pace than hoped.

This inflation trend may have direct implications for the upcoming European Central Bank (ECB) monetary policy meeting, where officials will weigh the possibility of adjusting interest rates to keep inflation in check without stifling economic growth.

Performance of European Stock Indexes

European equity markets ended the week with slight gains.

• Stoxx 600 rose 0.1%, recovering from two consecutive days of losses.
• Germany’s DAX index climbed 0.9%, breaking its losing streak and returning close to the record highs reached earlier in the week.

Among the most notable movements, UK investment firm M&G jumped 5% after announcing a strategic partnership with Japan’s Dai-ichi Life, highlighting renewed international interest in Europe’s financial sector.

Key ECB Meeting and Monetary Policy Expectations

The ECB’s monetary policy meeting, scheduled for the coming week, will be a key focus for markets. Investors will watch closely for signals of potential rate cuts or asset purchase adjustments, depending on updated inflation and growth figures in the euro area. The upcoming eurozone inflation data—due before the meeting—could influence the central bank’s decision-making process.

Commodities: Oil Pressured by OPEC+ and Gold Declines

Commodities ended May on a bearish note, weighed down by expectations of oversupply, ongoing trade tensions, and a stronger U.S. dollar. Both oil and gold reflected investor nervousness amid geopolitical developments and mixed economic signals.

Expected Production and Reserve Decisions

Oil prices declined in anticipation of a possible OPEC+ production increase for July, beyond the 411,000 barrels per day already agreed upon for May and June. According to Reuters, OPEC+ members are expected to debate this proposal during their next meeting in early June.

• Brent crude settled at $63.90 per barrel.
• West Texas Intermediate (WTI) ended at $60.79, with weekly losses exceeding 1%.

The bearish pressure was also fueled by a global surplus estimated at 2.2 million barrels per day, which could prompt a price correction to stimulate a supply-side response.

Tariff Impact on Crude Oil Prices

Beyond the OPEC+ factor, statements by Trump regarding China and the potential for new tariffs on Chinese imports also put downward pressure on crude. Analysts believe heightened trade tensions could reduce global oil demand, particularly if industrial activity in Asia slows as a result.

Additionally, the number of active drilling rigs in the United States has steadily declined, reaching its lowest level since November 2021, according to data from Baker Hughes. While this could eventually constrain future supply, downward pressure still dominates the short-term outlook.

Performance of Gold, Silver, and Other Metals

In the metals market, gold slipped 0.7% to $3,293.59 per ounce, dragged down by a stronger dollar and cooling inflation in the U.S., reducing demand for safe-haven assets. U.S. gold futures fell 0.9% to $3,315.40.

The dollar index rose 0.1%, making gold more expensive for holders of other currencies. Meanwhile, expectations of a Federal Reserve rate cut in September continue to provide longer-term support for the precious metal.

Other metals also posted losses:

• Silver: -1.2% to $32.94
• Platinum: -2.5% to $1,055.05
• Palladium: -0.6% to $967.30

Key Companies and Strategic Moves in the Markets

In May, several major companies announced acquisitions, strategic alliances, and strong financial results, drawing the attention of investors. The energy, technology, and healthcare sectors were especially active, showing strategies focused on growth, innovation, and consolidation.

Key Acquisitions in Energy and Technology

One of the month’s most notable deals was EOG Resources’ $5.6 billion acquisition of Encino Acquisition Partners, which will significantly increase the company’s production capacity in the Utica shale formation to 275,000 barrels of oil equivalent per day. The deal is expected to boost EOG’s projected EBITDA by 10% in 2025.

In the tech sector, Salesforce announced the acquisition of Informatica for $8 billion, aiming to strengthen its artificial intelligence ecosystem. The transaction is expected to be accretive to non-GAAP operating margin and EPS by fiscal year 2026.

Innovations and Partnerships in Artificial Intelligence

Nvidia once again took center stage, reporting record revenues of $44 billion in Q1 2026, a 69% year-over-year increase. Its data center revenue surged by 73%, reflecting explosive demand for AI infrastructure. Nvidia, in partnership with Dell Technologies, will also help build the Doudna supercomputer for the U.S. Department of Energy.

Other notable highlights include:

• C3.ai (AI), projecting revenues of up to $484 million, driven by expanding demand for AI applications.
• Zscaler, reporting $678 million in revenue and launching the Z-Flex program to advance enterprise cybersecurity.
• Nutanix (NTNX), which raised its annual outlook after strong performance in cloud and storage solutions.

New Contracts, International Expansion, and Notable Mergers

• Palantir Technologies (PLTR) shares rose 4% after securing key government contracts and reporting a 70% year-over-year increase in commercial revenue.
• Tesla (TSLA) announced the launch of its robotaxi service in Austin, set to begin June 12 with an initial fleet of Model Y vehicles.
• Energy Transfer (ET) signed a 20-year liquefied natural gas (LNG) export deal with Kyushu Electric of Japan.
• In the healthcare sector, Summit Therapeutics (SMMT) reported positive results from a late-stage lung cancer therapy trial, with plans to seek FDA approval.

These moves confirm that despite macroeconomic and geopolitical uncertainty, companies are doubling down on strategic growth, particularly in disruptive technologies, energy, and healthcare.

Outlook for June: Key Factors for Investors to Watch

After a May marked by a stock market rebound and geopolitical tension, investors head into June with a mix of cautious optimism and heightened awareness. Several critical factors will shape the direction of global financial markets, from monetary policy decisions to potential shifts in U.S. trade policy.

Market participants will focus on how corporations and governments respond to a climate of moderate growth, cooling inflation, and persistent geopolitical risk.

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Permíteme presentarme: soy Ignacio N. Ayago, un emprendedor consolidado 🚀, papá con poderes 🦄, un apasionado de la tecnología y la inteligencia artificial 🤖 y el fundador de esta plataforma 💡. Estoy aquí para ser tu guía en este emocionante viaje hacia el crecimiento personal 🌱 y el éxito financiero 💰.

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