U.S. Stocks Extend Gains Amid Lack of Visible Signs of Tariffs On Inflation

Barry Adams
16 May, 2025
New York City

Wall Street indexes looked higher in early trading as investors looked to add exposure to riskier assets following two inflation reports and retail sales data. 

The S&P 500 index edged up 0.1%, and the Nasdaq Composite advanced 0.2%, and the two widely followed benchmark indexes are set to extend gains for the fourth consecutive week. 

In the week to Thursday, the S&P 500 index advanced 4.5%, and the Nasdaq Composite jumped 6%, after the U.S. and China agreed to lower tariffs over the weekend. 

Market sentiment further improved after the U.S. rolled back additional tariffs on parcels arriving from China under the de minimis program, and China removed the ban on the purchase of Boeing aircraft.  

Despite the cooling of tensions, the two sides are far apart, and tensions could easily flare up in the weeks ahead. 

Two latest inflation reports also supported the market rebound, after the annual consumer price inflation eased to 2.3% and the producer price inflation declined 0.5% in April from the previous month.  

Over the last five weeks, market recovery has been halting amid worries that higher tariffs on foreign goods will eventually show up in macroeconomic data, but the steady decline in gasoline prices could soften the blow to consumers. 

Shipments from China are expected to rebound in early June as businesses scramble to make the most of the 90-day pause on punitive tariffs and restock warehouses.  

 

Housing Activities Contracted In April

Closer to home on the economic front, housing activities fell in April from a year ago, according to the preliminary data released by the U.S. Census Bureau. 

Building permits declined by 3.2% to an annual pace of 1.41 million, housing starts fell by 1.7% to 1.37 million, and housing completions dropped by 12.3% to 1.45 million from a year ago, respectively. 

 

Commodities, Currencies, Indexes, Yields

The S&P 500 index increased 0.04% to 5,919.48, the Nasdaq Composite edged up 0.2% to 19,147.60, and the Russell 2000 index advanced 0.6% to 2,097.02.

The yield on 2-year Treasury notes edged lower to 3.95%, 10-year Treasury notes decreased to 4.40%, and 30-year Treasury bonds declined to 4.86%.

WTI crude oil increased $0.41 to $62.03 a barrel, and natural gas prices edged lower by $0.02 to $3.38 a thermal unit.

Gold decreased by $62.48 to 3,174.20 an ounce, and silver edged down by $0.52 to $32.11.

The dollar index, which weighs the US currency against a basket of foreign currencies, decreased by 0.09 to 100.79 and traded at a two-year high.

 

U.S. Movers 

Charter Communications Inc. soared 9.4% to $459.0 after the cable television service provider agreed to merge with the privately held Cox Communications. 

The deal values Cox at an enterprise value of $34.5 billion, including $21.9 billion in equity and $12.6 net of all liabilities.

After the merger, Cox Enterprises will own 23% of the fully diluted outstanding shares, according to the merger announcement by the two companies. 

Charter CEO Chris Winfrey will lead the combined company, and Alex Taylor, chairman and CEO of Cox Enterprises, will assume the role of chairman of the combined company's board. 

Microsoft Corp. edged down 0.03% to $452.98, and the software company said it plans to eliminate 3% of its worldwide staff across all levels of management and geographies. 

Microsoft employs about 228,000 staff around the world, according to the latest data available in the company's annual report.

The current round of layoffs is the largest for the Redmond, Washington-based software company following the elimination of 10,000 positions in 2023.