From Tariff Turmoil To A Tactical Rebound

Monthly Market Update - May 2025

From Tariff Turmoil to a Tactical Rebound - Monthly Market Update (May 2025)Olivia Countiss, Financial Advisor | CEPA AAMS

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Countiss Wealth Management (CWM) - Monthly Market Update (MMU) - May 2025 - https://www.youtube.com/watch?v=L9WHMY2WPek

Summary

May 2025 saw a rebound in markets driven by strong tech earnings and a U.S.-China tariff truce. A Moody’s downgrade shook confidence mid-month, but cooling inflation revived hopes for a Fed pause. Despite global uncertainty, markets remained resilient.

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Monthly Market Update (May 2025)

Hey everyone. Welcome to the May monthly market update. We had quite a bit going on with Global Markets and US Tariff News.  At the beginning of the month, the market experienced a slight downturn due to new threats of tariffs on pharmaceutical imports, as well as concerns about the potential removal of the Federal Reserve Chairman.

Trump Warns of ‘Tariff Wall’ – President Trump’s early May comments on new pharmaceutical tariffs sparked market jitters and rate cut pressure on the Fed.

However, on May 11th, we had a US-China tariff truce, for now, which sparked a broad-based rally, which was really nice to see. So, we are back where we were around March in terms of where the market stands.

Tech Stocks Rally – Microsoft, Nvidia, Tesla

Strong tech earnings helped power the market rebound, with growth names like Microsoft, Nvidia, and Tesla leading the charge. Then came the jolt. Moody's downgraded the US sovereign credit rating for the first time in over a century. Treasury yields spiked and stocks wobbled in response.

Moody’s Downgrades U.S. Credit Rating – On May 16, Moody’s downgraded U.S. sovereign credit for the first time in over 100 years, citing fiscal instability and debt ceiling risks.

Yet, despite all of that, inflation has cooled, which is good news for us. We believe the Federal Reserve has reason to either pause or lower interest rates. This has led investors to shift slightly more towards growth, tech, and consumer discretionary sectors, among others.

Federal Reserve Building – Softer inflation data in late May led investors to believe the Fed may pause or pivot, boosting market optimism.

 That's good news. Again, for the past two or three years, interest rates have been the overwhelming factor that has captured people's attention the most, and we saw that in this past month.

Market Leadership Chart – U.S. Sectors – Technology surged 10.9% in May, while consumer discretionary, communication services, and industrials followed with strong gains.

Tech led with a 10.9% gain throughout the month. Consumer discretionary and industrials followed. Healthcare, energy, and real estate are still struggling with policy as well as rate uncertainty. International lagged its US peers. However, Taiwan did see a 12.5% gain with a new trade deal with the U.K.

International Markets Chart – While international stocks mostly lagged, Taiwan jumped 12.5%, and the UK signed a notable new trade deal.

China as a whole is still in uncertain territory, given its reliance and codependence on the United States, so there is a lot of uncertainty regarding the Chinese market.   So, what is the takeaway for the month of May? We have seen the market return to the level it was in March, which is a welcome development. 

Amid volatility and policy shifts, investors stayed alert, navigating uncertainty with a focus on long-term opportunities.

However, tension and uncertainty remain prevalent in the market. We have the tariff deadlines, both for the broad tariffs and the Chinese tariffs, which will take place over the summer. We had the budget reconciliation bill working its way through Congress, so we have several items pending on the market, which is keeping uncertainty around. The market remains remarkably resilient in the face of that uncertainty, which is truly commendable. We are relatively cautious, but we are staying on top of it and seeing if any opportunities arise from the various developments as they unfold.

 So as always, we appreciate your business, but we value your trust, and I'll keep you posted. --

Countiss Wealth Management offers trusted financial guidance tailored to your unique goals. Our Monthly Market Updates help you stay informed on key economic trends, market volatility, and investment strategies. As a father/daughter advisor duo based in Flowood, Mississippi, we believe in the power of diversification, long-term planning, and personalized service. Let us help you build confidence in your financial future—no matter what the market brings.