By John Meyer, consultant in financial affairs – Eurasia Business News, May 31, 2025. Article no. 1534.

U.S. stocks posted their best month since late 2023 in May 2025, with the S&P 500 rising more than 6%, the Nasdaq Composite up about 9.6%, and the Dow Jones Industrial Average gaining around 4%. This strong performance came despite ongoing trade tensions, tariff uncertainties, and a mixed corporate earnings season.

Key factors contributing to this robust market performance included:

Signs of economic resilience, such as solid employment data and easing inflation measures.

Temporary easing of U.S.-China trade tensions, including a 90-day tariff reduction agreement that helped lift investor sentiment mid-month. The U.S. and China agreed to a 90-day truce starting May 14, lowering the reciprocal tariffs from as high as 125% down to 10%. However, the existing 20% fentanyl-related tariffs remain in place, making the effective tariff rate on most Chinese goods about 30% currently.

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Strong earnings reports from major technology companies, especially those involved in artificial intelligence, which fueled a rebound in tech stocks like Nvidia, Constellation Energy, and Super Micro Computer.

Progress on domestic policy fronts, including moves toward a significant tax-cutting bill in Congress.

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Despite these positives, concerns about the trade war lingered. President Trump reignited trade conflicts late in the month, and legal battles over tariffs continued, creating underlying uncertainty. 

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JPMorgan Chase CEO Jamie Dimon emphasized the need for swift government action to resolve disputes with China, highlighting the geopolitical risks still facing markets.

Speaking at the Reagan National Economic Forum, Dimon highlighted that while China is a potential rival excelling in many areas, the greater concern lies within the U.S. itself, including issues like mismanagement, permitting, regulations, immigration, taxation, urban education, and healthcare. He warned that without resolving these internal problems, the country risks losing its economic growth potential and global leadership

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Overall, the stock market’s ability to shrug off trade war jitters and post its strongest monthly gains since 2023 reflects a cautious optimism among investors about the U.S. economy’s fundamentals and the potential for easing trade tensions in the near term.

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© Copyright 2025 – Eurasia Business News. Article no. 1533.