Tariff Truce, Market Juice

April 28 – May 2, 2025

May 16, 2025

Hello, Decoder - markets are still digesting April’s tariff chaos, but May is starting with a hint of optimism. Let’s decode what moved markets last week, why it matters, and what smart investors are doing in response.

 📊 MARKET SNAPSHOT

  • S&P 500 rose 2.9%, marking a 9-day win streak — the longest in years.

  • Nasdaq gained 3.4%, led by AI and tech names like Nvidia and Meta.

  • Gold cooled after hitting record highs, while oil plunged on oversupply fears.

  • Bond yields steadied as rate hike expectations eased, central banks are pivoting to a more dovish stance.

RESILIENCE AMID POLICY CHAOS

Fire This Is Fine GIF by MOODMAN

What Happened:
Markets rebounded sharply for a second week, with investors shrugging off early April’s trade-war panic. U.S. stocks clawed back their tariff losses, powered by strong jobs data, better-than-feared Q1 earnings, and hopes that the Fed and global central banks are done tightening.

Why It Matters:
The swift reversal underscores how sensitive markets are to policy tone — but also how quickly confidence returns when the worst-case doesn’t materialize. This isn’t about euphoria; it’s about relief. Resilient labor data and central bank flexibility gave investors enough footing to look past the volatility.

What It Means For You:
Expect more policy-driven whiplash in 2025. But the companies outperforming now tend to have three traits: pricing power, fortress balance sheets, and global adaptability. When uncertainty reigns, investors are rewarding strength and self-sufficiency - not speculative stories.

📈 CHART OF THE WEEK

The S&P 500’s 9-day rally wiped out all post-tariff losses and marked the longest win streak since 2017

🧩 QUICK DECODER: MARKET BREADTH

When more stocks rise than fall, we call that strong market breadth. Last week, advancing issues outnumbered decliners nearly 4-to-1 on the NYSE — a sign of broad participation, not just tech-led gains.

✅ ACTIONABLE TAKEAWAY  

When uncertainty rules, focus on quality. That means companies with pricing power, strong balance sheets, and global flexibility - the kind that can adapt when policy winds shift. Think Nvidia, which still commands AI chip pricing and rides secular tailwinds across sectors. Or Meta Platforms, which keeps pulling in ad dollars globally even as macro risks swirl. And Alphabet, whose earnings beat and $70B buyback signal both financial muscle and confidence. Even Commerzbank, often overlooked, surged on strong results - a reminder that quality can show up in unexpected places.

🧭 THIS WEEK’S INVESTOR TO-DO LIST

  • Reassess your portfolio for companies with proven pricing power and margin resilience

  • Review holdings in cyclical sectors; volatility may return post-trade talks

  • Watch Wednesday’s CPI print - inflation surprise could shift rate expectations

  • Keep an eye on tech earnings momentum, especially outside the Magnificent Seven

  • Consider trimming exposure to companies heavily reliant on tariff-sensitive imports

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