Weaker Consumer Confidence Dampens A Good Week For Stocks

2025-05-20 02:30:00 ET

Summary

• A 90-day pause on the US-China tariffs was good enough to lift stocks, but not the US dollar.
• Tariffs aren’t showing up in higher inflation yet, but the Federal Reserve is likely to remain in wait-and-see mode until hard data turns.
• Comments from Germany’s foreign minister pointed to greater confidence that defense spending will likely rise meaningfully.

We’ve already used the roller coaster analogy, and it’s time to use it again as we moved higher on this market ride last week. The S&P 500 Index is now less than 4% below its all-time high ¹ following a strong week for stocks. The German DAX Index closed out the week at an all-time high and has risen nearly 19% in 2025. ² Though stocks moved higher, the US dollar resumed its downtrend. ³ ...

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