{"id":64229,"date":"2025-05-19T02:00:21","date_gmt":"2025-05-19T07:00:21","guid":{"rendered":"https:\/\/www.tradestation.com\/insights\/?p=64229"},"modified":"2025-05-19T07:35:50","modified_gmt":"2025-05-19T12:35:50","slug":"stocks-up-politics-bullish","status":"publish","type":"post","link":"https:\/\/www.tradestation.com\/insights\/2025\/05\/19\/stocks-up-politics-bullish\/","title":{"rendered":"Stocks Near Highs as Trade Policies Turn Bullish"},"content":{"rendered":"<p>Stocks are nearing their old highs as trade-related moves by the Trump Administration turn more favorable.<\/p>\n<p>The S&amp;P 500 jumped 5.3 percent between Friday, May 9, and Friday May 16. The index closed at its highest level since late February and is just 3.1 percent below its record peak. Some 89 percent of its members advanced, along with every major sector. Growth stocks, including chipmakers, led the surge.<\/p>\n<p>The week began with better-than-expected political news, followed by more positive headlines. First, Treasury Secretary Scott Bessent slashed tariffs on most Chinese goods from 125 percent to 30 percent. (Technically, they may go back up after three months.) The next day, President Trump announced a string of Middle East deals for large technology companies. Nvidia (NVDA) will supply 18,000 Blackwell AI chips to Saudi Arabia. Amazon.com (AMZN) will open data centers and Super Micro Computer (SMCI) will deliver $20 billion of servers to the oil-rich kingdom.<\/p>\n<p>Networking giant Cisco Systems (CSCO) also jumped after beating estimates and raising guidance, partially because of machine-learning demand. Those reports not only confirmed the ongoing AI-investment boom. They also illustrated the widening market for AI technology &#8212; especially from sovereign governments.<\/p>\n<p>The next significant event for AI companies may be NVDA&#8217;s earnings report next Wednesday, May 28.<\/p>\n<h2>Bullish Nukes<\/h2>\n<table class=\" alignright\" style=\"width: 32.8538%; border-collapse: collapse; height: 203px;\">\n<caption><strong>Biggest Gainers in the S&amp;P 500 Last Week<\/strong><\/caption>\n<tbody>\n<tr>\n<td style=\"width: 79.0349%;\">Super Micro Computer (SMCI)<\/td>\n<td style=\"width: 20.9651%;\">+44%<\/td>\n<\/tr>\n<tr>\n<td style=\"width: 79.0349%;\">NRG Energy (NRG)<\/td>\n<td style=\"width: 20.9651%;\">+33%<\/td>\n<\/tr>\n<tr>\n<td style=\"width: 79.0349%;\">First Solar (FSLR)<\/td>\n<td style=\"width: 20.9651%;\">+27%<\/td>\n<\/tr>\n<tr>\n<td style=\"width: 79.0349%;\">Dell Technologies (DELL)<\/td>\n<td style=\"width: 20.9651%;\">+19%<\/td>\n<\/tr>\n<tr>\n<td style=\"width: 79.0349%;\">Tesla (TSLA)<\/td>\n<td style=\"width: 20.9651%;\">+17%<\/td>\n<\/tr>\n<tr>\n<td style=\"width: 79.0349%;\"><em>Source: TradeStation Data<\/em><\/td>\n<td style=\"width: 20.9651%;\"><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>NRG Energy (NRG) had its biggest weekly gain in eight years after beating estimates and announcing an acquisition that&#8217;s expected to boost profits. The news was reminiscent of rallies in other nuclear-power companies like Constellation Energy (CEG) that are benefiting as AI gobbles up more electricity.<\/p>\n<p>Smaller companies associated with atomic energy also jumped on strong results, including NuScale Power (SMR) and Oklo (OKLO).<\/p>\n<p>Technology was the top-performing sector overall thanks to the Middle East-AI deals. SMCI led the charge, also lifting competitor Dell Technologies (DELL). Tesla (TSLA) continued to rebound, partially because of improved trade relations between the U.S. and China.<\/p>\n<p>First Solar (FSLR) jumped after Congress proposed a budget that will preserve clean-energy credits.<\/p>\n<p>Retailers climbed after tariffs on Chinese goods were lowered. They additionally benefited from Dick&#8217;s Sporting Goods (DKS) acquiring Foot Locker (FL).<\/p>\n<p>Aside from tech, consumer discretionaries and industrials were the top-performing sectors.<\/p>\n<h2>Safe Havens Lag<\/h2>\n<p>Safe havens like health care, real estate and consumer staples had the smallest gains last week. <a href=\"https:\/\/www.tradingview.com\/chart\/GDX\/vhR7iNBc-Gold-Miners-May-Be-Fatigued\/\" target=\"_blank\" rel=\"noopener\">Gold miners<\/a>, which rallied as the market crashed in February and March, tumbled.<\/p>\n<p>That was partially caused by bullish risk appetite in the market. It also resulted from a historic collapse in UnitedHealth (UNH), which is having its worst quarter this century. The HMO giant plunged after CEO Andrew Witty resigned, and the <em>Wall Street Journal<\/em> reported it was the target of a criminal probe. (UNH denied knowledge of the investigation and called the article &#8220;deeply irresponsible.&#8221;) The slide followed <a href=\"https:\/\/www.tradestation.com\/insights\/2025\/04\/21\/stocks-frozen-tariff-uncertainty\/\">another selloff<\/a> on April 17 caused by weak results.<\/p>\n<table class=\" alignright\" style=\"height: 181px; width: 31.6547%; border-collapse: collapse;\">\n<caption><strong>Biggest Decliners in the S&amp;P 500 Last Week<\/strong><\/caption>\n<tbody>\n<tr style=\"height: 24px;\">\n<td style=\"width: 74.5614%; height: 24px;\">UnitedHealth (UNH)<\/td>\n<td style=\"width: 25.4386%; height: 24px;\">-23%<\/td>\n<\/tr>\n<tr style=\"height: 24px;\">\n<td style=\"width: 74.5614%; height: 24px;\">Fiserv (FI)<\/td>\n<td style=\"width: 25.4386%; height: 24px;\">-9.5%<\/td>\n<\/tr>\n<tr style=\"height: 24px;\">\n<td style=\"width: 74.5614%; height: 24px;\">Hershey (HSY)<\/td>\n<td style=\"width: 25.4386%; height: 24px;\">-7.3%<\/td>\n<\/tr>\n<tr style=\"height: 24px;\">\n<td style=\"width: 74.5614%; height: 24px;\">Newmont (NEM)<\/td>\n<td style=\"width: 25.4386%; height: 24px;\">-7.2%<\/td>\n<\/tr>\n<tr style=\"height: 24px;\">\n<td style=\"width: 74.5614%; height: 24px;\">CVS Health (CVS)<\/td>\n<td style=\"width: 25.4386%; height: 24px;\">-6.6%<\/td>\n<\/tr>\n<tr style=\"height: 24px;\">\n<td style=\"width: 74.5614%; height: 24px;\"><em>Source: TradeStation Data<\/em><\/td>\n<td style=\"width: 25.4386%; height: 24px;\"><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>Fiserv (FI) declined after talking down growth in its Clover payment network.<\/p>\n<p>Newmont Mining (NEM) fell along with precious metals.<\/p>\n<h2>Hawkish Fed<\/h2>\n<p>Interestingly, last week&#8217;s rally occurred despite hawkish news on interest rates.<\/p>\n<p>&#8220;We may be entering a period of more frequent, and potentially more persistent, supply shocks,&#8221; Federal Reserve Chair Jerome Powell said on Thursday. He partially associated the disruptions with tariffs. Vice Chair Philip Jefferson and governor Adriana Kugler made similar comments.<\/p>\n<p>Chances of a rate cut also diminished, according to CME&#8217;s FedWatch tool. The market now sees greater odds of a reduction in September instead of July. A month ago, June was considered probable.<\/p>\n<p>Other economic data was mixed. While April&#8217;s consumer price index (CPI) inflation report was lower than expected. However, Walmart (WMT) and Morgan Stanley economist Ellen Zentner warned prices will increase because of tariffs. Retail sales and jobless claims matched estimates. Housing data broadly missed because of high mortgage rates: starts, permits and NAHB sentiment.<\/p>\n<p>Moody&#8217;s downgraded the U.S.&#8217;s sovereign credit rating from Aaa to Aa1, citing budget deficits and rising interest costs. The move comes amid struggles to pass a budget, extend tax cuts and raise the debt ceiling.<\/p>\n<p>Consumer sentiment also fell more than expected to its second-lowest reading ever. Tariff and inflation worries were the culprits.<\/p>\n<div id=\"attachment_64241\" style=\"width: 1034px\" class=\"wp-caption alignnone\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-64241\" class=\"size-large wp-image-64241\" src=\"https:\/\/cdn.tradestation.com\/uploads\/sites\/2\/CME_fedwatch_sept_20250516-1024x633.jpg\" alt=\"\" width=\"1024\" height=\"633\" srcset=\"https:\/\/cdn.tradestation.com\/uploads\/sites\/2\/CME_fedwatch_sept_20250516-1024x633.jpg 1024w, https:\/\/cdn.tradestation.com\/uploads\/sites\/2\/CME_fedwatch_sept_20250516-300x185.jpg 300w, https:\/\/cdn.tradestation.com\/uploads\/sites\/2\/CME_fedwatch_sept_20250516-768x475.jpg 768w, https:\/\/cdn.tradestation.com\/uploads\/sites\/2\/CME_fedwatch_sept_20250516-1080x668.jpg 1080w, https:\/\/cdn.tradestation.com\/uploads\/sites\/2\/CME_fedwatch_sept_20250516.jpg 1142w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><p id=\"caption-attachment-64241\" class=\"wp-caption-text\"><em>CME FedWatch tool showing potential monetary policy in September. Notice how the highest probabilities have shifted to higher target rates.<\/em><\/p><\/div>\n<h2>Charting the Market<\/h2>\n<p>While consumer sentiment weakened, data from the American Association of Individual Investors showed investor sentiment improving. Its latest survey showed the percentage of bearish respondents dropping from 52 percent to 44 percent. That broke a record streak of 11 weeks above 50 percent. Is the stock market looking past a historic crisis that forced some professional money managers to the sidelines? Could buyers outnumber sellers, keeping pullbacks shallow?<\/p>\n<p>Chart watchers may see confirmation of those questions in the sh0rt-term price action. The advance\/decline (A\/D) line hit a new record high, reflecting broad participation in the rally. The moving average convergence\/divergence (MACD) oscillator is also rising sharply.<\/p>\n<p>Sector performance could also validate the bullish sentiment because risk-on industries are leading in the past month as safe havens lag. It&#8217;s also the opposite of <a href=\"https:\/\/www.tradestation.com\/insights\/2025\/02\/24\/stocks-potential-reversal\/\">what happened in February<\/a> as the tariff selloff began.<\/p>\n<p>The earlier period may now become relevant because the S&amp;P 500 ended last week just 4 points above its weekly close on February 28. As a result, traders may view the price zone of 5,954 to 5,958 as potential resistance.<\/p>\n<p>To the downside, they may view the 5,780 area as potential support. (That was a low in mid-January and a high in late March.)<\/p>\n<p>Because those levels may create a range, some traders could expect consolidation &#8212; especially given the sharpness of the recent surge. The calendar may also favor a quiet drift. (See below.)<\/p>\n<div id=\"attachment_64239\" style=\"width: 1034px\" class=\"wp-caption alignnone\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-64239\" class=\"size-large wp-image-64239\" src=\"https:\/\/cdn.tradestation.com\/uploads\/sites\/2\/SPY_20250516-1024x490.jpg\" alt=\"\" width=\"1024\" height=\"490\" srcset=\"https:\/\/cdn.tradestation.com\/uploads\/sites\/2\/SPY_20250516-1024x490.jpg 1024w, https:\/\/cdn.tradestation.com\/uploads\/sites\/2\/SPY_20250516-300x143.jpg 300w, https:\/\/cdn.tradestation.com\/uploads\/sites\/2\/SPY_20250516-768x367.jpg 768w, https:\/\/cdn.tradestation.com\/uploads\/sites\/2\/SPY_20250516-1536x734.jpg 1536w, https:\/\/cdn.tradestation.com\/uploads\/sites\/2\/SPY_20250516-1080x516.jpg 1080w, https:\/\/cdn.tradestation.com\/uploads\/sites\/2\/SPY_20250516.jpg 1920w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><p id=\"caption-attachment-64239\" class=\"wp-caption-text\"><em>SPDR S&amp;P 500 ETF (SPY), daily chart, with select patterns and indicators.<\/em><\/p><\/div>\n<h2>The Week Ahead<\/h2>\n<p>After all, few important events are scheduled this week. It also leads into the three-day Memorial Day weekend.<\/p>\n<p>Nothing important is scheduled for today, however there could be developments on the budget and tax cuts.<\/p>\n<p>Tomorrow features earnings from Home Depot (HD) and Palo Alto Networks (PANW).<\/p>\n<p>Wednesday brings crude-oil inventories and results from Snowflake (SNOW), Baidu (BIDU), TJX (TJX) and Lowe&#8217;s (LOW). The Court of International Trade will also hear oral arguments from states challenging President Trump&#8217;s tariffs. Oregon is the lead plaintiff. Others include California, New York, Illinois, Minnesota and Arizona.<\/p>\n<p>Initial jobless claims and existing home sales are on Thursday. Deckers Outdoors (DECK), one of the biggest decliners because of tariffs, reports earnings.<\/p>\n<p>Nothing important is scheduled for Friday.<\/p>\n<div class=\"et_pb_section et_pb_section_4_tb_body article-content et_section_regular\">\n<div class=\"et_pb_row et_pb_row_4_tb_body\">\n<div class=\"et_pb_column et_pb_column_4_4 et_pb_column_9_tb_body et_pb_css_mix_blend_mode_passthrough et-last-child\">\n<div class=\"et_pb_module et_pb_post_content et_pb_post_content_0_tb_body\">\n<hr class=\"wp-block-separator has-alpha-channel-opacity\" \/>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<p>&nbsp;<\/p>\n<table border=\"1\">\n<caption><strong>Standardized Performances for ETFs mentioned above<\/strong><\/caption>\n<tbody>\n<tr>\n<td><strong>ETF<\/strong><\/td>\n<td><strong>1 Year<\/strong><\/td>\n<td><strong>5 Years<\/strong><\/td>\n<td><strong>10 Years<\/strong><\/td>\n<\/tr>\n<tr>\n<td>SPDR S&amp;P 500 (SPY)<\/td>\n<td>+10.47%<\/td>\n<td>+90.90%<\/td>\n<td>+166.02%<\/td>\n<\/tr>\n<tr>\n<td colspan=\"4\"><em>As of April 30, 2025. Based on TradeStation Data<\/em><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><em>Exchange Traded Funds (\u201cETFs\u201d) are subject to management fees and other expenses. Before making investment decisions, investors should carefully read information found in the prospectus or summary prospectus, if available, including investment objectives, risks, charges, and expenses.\u00a0<a href=\"https:\/\/www.tradestation.com\/insights\/etf-disclosures\/\">Click here<\/a>\u00a0to find the prospectus.<\/em><\/p>\n<p><em>Performance data shown reflects past performance and is no guarantee of future performance. The information provided is not meant to predict or project the performance of a specific investment or investment strategy and current performance may be lower or higher than the performance data shown. Accordingly, this information should not be relied upon when making an investment decision.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Stocks are nearing their old highs as moves by the Trump Administration&#8217;s turn more favorable.<\/p>\n","protected":false},"author":39,"featured_media":63441,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","inline_featured_image":false,"footnotes":""},"categories":[103,13],"tags":[139,1206,1367,301,961,477,1140,1308,117,142],"class_list":["post-64229","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-in-review","category-stocks","tag-cvs","tag-dell","tag-fi","tag-fslr","tag-hsy","tag-nem","tag-nrg","tag-smci","tag-tsla","tag-unh","et-has-post-format-content","et_post_format-et-post-format-standard"],"yoast_head":"<!-- This site is optimized with the Yoast SEO 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Drawing on more than two decades of experience as a financial journalist and analyst, his background includes equities, emerging markets, fixed-income and derivatives. He previously worked at Bloomberg News, CNBC and E*TRADE Financial. Russell systematically reviews countless global financial headlines and indicators in search of broad tradable trends that present opportunities repeatedly over time. Customers can expect him to keep them apprised of sector leadership, relative strength and the big stories \u2013 especially those overlooked by other commentators. 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