Can US Stocks Sustain Their Winning Streak Amid Mixed Economic Signals?

US stock markets showed resilience on Thursday, May 15, 2025, at 09:06 PM +04, as the S&P 500 eked out a 0.3% gain, marking its fourth consecutive day of gains, while the Dow Jones Industrial Average rose 121 points, or 0.2%, to 42,377 points. The Nasdaq Composite, however, slipped 0.07% to 18,966 points, reflecting a cautious undertone despite a strong week driven by optimism over the US-China 90-day tariff suspension, which reduced duties to 30% on Chinese imports and 10% on US goods. This agreement has bolstered market sentiment, easing fears of an immediate economic downturn and inflationary spike, though underlying economic data paints a mixed picture for the sustainability of the rally.

The week’s performance has been led by tech giants, with notable gains in stocks like Nvidia and Tesla, up over 14% and 13% respectively, alongside Meta Platforms at 10%, Amazon at 7%, and Alphabet at 8%. The Nasdaq has surged 6% week-to-date, outpacing the S&P 500’s 3.9% rise and the Dow’s 1.7% increase, reflecting robust investor confidence in technology amid a broader market uptrend. However, individual stock movements highlighted market disparities—Foot Locker soared 84% following a $2.4 billion merger announcement with Dick’s Sporting Goods, while UnitedHealth dropped 14% amid reports of a potential Justice Department probe into the insurer, adding to market volatility.

Economic data released on Thursday revealed a complex landscape, with the Producer Price Index (PPI) unexpectedly falling 0.5% month-over-month in April, against forecasts of a 0.3% rise, signaling easing inflationary pressures at the wholesale level. Retail Sales grew by a modest 0.1%, aligning with expectations but indicating cautious consumer spending, while Industrial Production declined slightly more than anticipated, hinting at manufacturing softness. These figures, combined with the recent tariff truce, have fueled speculation of Federal Reserve rate cuts, with market expectations now at 53 basis points for 2025, up from 48.5 basis points earlier in the week, potentially supporting further equity gains if economic activity stabilizes.

Despite the positive momentum, concerns linger about the rally’s longevity, with investors navigating a “wall of worry” that includes trade uncertainties and mixed economic indicators. The US Dollar Index (DXY) dipped to 100.88, reflecting a slight softening of the Greenback amid renewed rate cut bets, which could further bolster risk assets like stocks if the trend continues. As markets look toward the summer, the ability of this rally to broaden across sectors and sustain its momentum will depend on whether upcoming data, such as consumer sentiment and Fed commentary, reinforces the current optimism or signals a need for consolidation, keeping investors on edge in this cautiously optimistic environment.