S&P 500 ends slightly up; traders watch US-China trade talks
Traders work on the floor at the New York Stock Exchange (NYSE) in New York, US, on Monday, May 19, 2025.- Photographer: Michael Nagle/Bloomberg
The S&P 500 ended slightly higher on Monday, lifted by Amazon and Alphabet, while investors watched U.S.-China negotiations aimed at mending a trade dispute that has rattled financial markets for much of the year.
Top officials from both countries have kicked off discussions, looking to get back on track with a preliminary trade agreement struck last month that had briefly cooled tensions between the world's largest economies.
"The market deems any dialogue with Beijing as progress, whether or not it leads to tangible results. The market is just going to take the administration's word for it, until proven otherwise.' said Jake Dollarhide, CEO of Longbow Asset Management in Tulsa, Oklahoma.
Amazon and Google parent Alphabet each gained and helped lift the S&P 500.
Amazon.com said it plans to invest at least $20 billion in Pennsylvania to expand data center infrastructure, adding to the billions of dollars the technology giant has committed to the expansion of artificial intelligence.
Apple dipped after the iPhone maker kicked off its annual software developer conference with incremental developments that did little to impress investors.
According to preliminary data, the S&P 500 gained 3.84 points, or 0.06%, to end at 6,004.20 points, while the Nasdaq Composite gained 57.93 points, or 0.30%, to 19,587.89. The Dow Jones Industrial Average fell 8.82 points, or 0.02%, to 42,754.05.
Expectations of more trade deals between the U.S. and its major trading partners, along with upbeat earnings and tame inflation data, helped U.S. equities rally in May, with the S&P 500 and the tech-heavy Nasdaq notching their best monthly gains since November 2023.
The S&P 500 remained about 2% below its all-time high touched in February, while the Nasdaq is about 3% below its December record high.
Warner Bros Discovery fell after the company said it would separate its studios and streaming business from its struggling cable television networks. Immediately after the announcement, it had surged as much as 13%.
Shares of McDonald's dipped after Morgan Stanley downgraded the fast-food restaurant to "equal-weight" from "overweight".
Robinhood Markets dropped after S&P Dow Jones Indices left S&P 500 constituents unchanged in its latest rebalancing, following recent speculation that the online brokerage would be added to the benchmark index.
Major data releases this week include readings on May consumer prices on Wednesday and initial jobless claims on Thursday. While investors widely expect the Federal Reserve to keep interest rates unchanged next week, focus will be on any signs of pick-up in inflation as Trump's tariffs risk raising price pressures. - Reuters
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A new world order is here. Is your portfolio ready?
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In just a matter of days, Trump's Liberation Day tariffs have injected the global economy with extraordinary levels of volatility and uncertainty. Trade decisions — along with a slew of other major policy decisions — are now made on Truth Social, often catching even his own advisors off guard. While the tariffs have since been paused, they have not been cancelled. The outcome of ongoing trade negotiations remains uncertain and there's a possibility that the punishingly high tariff rates could be reinstated once the deadline passes. The situation looks increasingly fragile. As if that weren't enough, the legal wrangling over the tariffs have added yet another layer of uncertainty. Most recently, a US trade court blocked the tariffs, ruling that Trump had overstepped his authority — only for them to be reinstated a day later, pending the appeal process. Trade talks will now be complicated by doubts over the administration's authority to follow through on its threats. Rather than offering relief, the development has introduced new complications at the worst possible time. Besides, even if trade deals are struck before the deadline, there's no guarantee they will hold. Given the unpredictable — and often arbitrary — nature of Trump's decision-making, he could very well renege on these deals. With no real clarity ahead, U.S. businesses are faced with an unprecedented level of uncertainty, which has been further compounded by other factors. Lower Market Correlations Help Enhance Diversification As a risk-mitigation strategy, diversification only reduces volatility if the markets involved have low or negative correlations. If all markets move in lockstep, it doesn't matter how many geographic regions you invest — diversification won't reduce risk. This has certainly been the case over the past two decades, as correlations between US and non-US stocks have risen significantly. 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