Wafric News – May 14, 2025

Wall Street bounced back Tuesday with a strong showing from tech and AI stocks, as investors welcomed fresh signs that U.S. inflation may be easing — at least for now.

The S&P 500 climbed 0.7%, officially erasing its losses for the year and inching closer to its all-time high. The Nasdaq surged an even more impressive 1.6%, driven by big gains in artificial intelligence stocks. The Dow, however, dropped 269 points (0.6%), weighed down heavily by a plunge in UnitedHealth shares.

What moved markets? A better-than-expected inflation report. April data showed consumer prices rose at a slower pace, ticking down to 2.3% from 2.4% in March — despite ongoing trade tensions and companies racing to beat potential tariff hikes. For investors worried about stagflation — that painful mix of stagnant growth and high inflation — this was a sign the U.S. economy may still thread the needle.

"This is not the all-clear, but it's a strong signal that inflation isn't running out of control," said one analyst watching the data closely.

Still, uncertainty hangs heavy. With tariffs from the Trump administration still looming, many expect inflationary pressures to persist in the months ahead. As a result, the Federal Reserve is likely to hold off on cutting interest rates until a clearer trend emerges.

Financial markets are also reacting to global developments, especially the fragile U.S.-China trade truce. A 90-day pause in hostilities has been announced, giving room for negotiations, but experts warn that the deal is far from final.

“Investors know the trade drama isn’t over,” said Louis Wong of Phillip Securities Group. “Caution is still the best strategy in this environment.”

While economic headlines painted a mixed picture, AI and crypto brought a burst of optimism to tech-heavy indexes. Coinbase Global soared 24% after being added to the S&P 500 index, a move expected to boost demand for its stock.

Nvidia, a dominant player in the AI chip market, jumped 5.6% after announcing a major partnership with Saudi Arabia’s Humain to ship 18,000 chips for a new data center initiative. Super Micro Computer and Palantir Technologies also posted double-digit gains.

GE Vernova added 4% on hopes it will play a key role in powering large-scale AI infrastructure.

But it wasn’t all green on the screen. UnitedHealth Group tanked nearly 18% after the insurer pulled its full-year forecast, citing unexpectedly high medical costs. The company also announced a sudden leadership change: CEO Andrew Witty is stepping down, with board chairman Stephen Hemsley stepping in.

That sharp drop in a heavyweight stock was enough to pull the Dow into the red for the day.

Overseas, markets were mostly upbeat. Tokyo’s Nikkei rose 1.4%, led by auto stocks like Nissan, which gained 3% even as it announced plans to cut 20,000 jobs after reporting a $4.5 billion annual loss. European indices also closed higher, though Hong Kong’s Hang Seng dropped 1.9%.

Wafric News will continue monitoring market shifts as the Federal Reserve, trade policymakers, and the tech sector battle for influence over investor sentiment in a complex economic landscape.


By WafricNews Desk.