Wall Street Dips Slightly After Month-Long Rally/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ Wall Street saw mixed results Friday, capping off what may be its best month since November 2023. The S&P 500 dipped slightly as investors weighed upbeat earnings against tariff turmoil. President Trump’s unpredictable trade policies and a pending court appeal kept traders cautious.
Wall Street Monthly Wrap-Up: Quick Looks
- S&P 500 dips 0.2%, still on pace for best month since 2023.
- Dow Jones up slightly, Nasdaq down 0.5% in Friday morning trading.
- Gap shares plunge 21% despite strong earnings, citing potential $300M tariff impact.
- Ulta Beauty gains 14.8% after raising revenue forecast.
- Red Robin surges 69%, beating Q1 earnings expectations.
- Trump reignites trade tensions, accusing China of violating tariff agreement.
- Court ruling blocks many Trump tariffs, but they remain during appeal.
- Consumer sentiment improves, bolstered by temporary tariff pause.
- Treasury yields steady, Fed holds rates amid inflation and tariff concerns.
Deep Look: Wall Street Rides Strong May Rally Despite Trade Turmoil
NEW YORK — As May comes to a close, Wall Street is drifting, but still cruising toward its strongest month since November 2023, bolstered by resilient earnings and temporarily paused tariffs. But investors remain cautious, watching for what’s next in President Donald Trump’s evolving trade strategy, particularly toward China.
On Friday, the S&P 500 slipped 0.2%, while the Dow Jones Industrial Average edged up 13 points, and the Nasdaq dropped 0.5%. The movement caps off a largely bullish month despite headwinds from inflation fears, tariff battles, and geopolitical tensions.
Retail Winners and Losers
Retail earnings were front and center Friday, with mixed results:
- Gap Inc. beat Wall Street expectations but tumbled 21.1% after warning that new tariffs could add $300 million in costs this fiscal year. The retailer is scrambling to reduce the financial hit but acknowledged that only about half may be offset through internal measures.
- Ulta Beauty soared 14.8%, fueled by better-than-expected earnings and an upgraded full-year revenue outlook, despite CEO Kecia Steelman labeling the market environment as “fluid.”
- Costco shares rose 3.7%, continuing a steady performance streak as its quarterly results slightly topped analyst projections.
- Red Robin smashed expectations, skyrocketing 69% after posting a surprise profit.
- American Eagle Outfitters, however, slid 1.4% after withdrawing its 2025 forecast, citing economic uncertainty linked in part to tariffs.
Tariffs and Trade: Trump Strikes Again
After temporarily halting his 145% tariffs on Chinese and EU goods, Trump threw another curveball Friday morning. In a Truth Social post, the president accused China of breaking its end of the 90-day tariff truce deal.
“So much for being Mr. NICE GUY!” Trump wrote.
Despite the bluster, market reaction was limited, with most indexes stabilizing by mid-morning. Analysts say the uncertainty surrounding tariffs is keeping investors cautious even during a bullish earnings season.
A U.S. court ruling on Wednesday struck down key elements of Trump’s tariffs. However, the administration has appealed, keeping the levies in place for now.
“Trump’s strategy continues to whipsaw markets,” said one analyst. “The temporary pause helped sentiment, but nobody believes it’s permanent.”
Economic Indicators Offer Mixed Signals
Friday’s economic data painted a mixed picture:
- The Federal Reserve’s preferred inflation gauge came in slightly lower than expected for April, easing fears of runaway prices.
- The University of Michigan’s consumer sentiment index rose more than forecast in May, largely due to Trump’s short-term tariff relief. However, concerns remain over long-term economic stability.
“Consumers are less worried than last month, but still uneasy about the future,” said Joanne Hsu, director of the survey.
Treasury yields held relatively steady:
- 10-year yield dipped to 4.40% from 4.43%.
- 2-year yield remained at 3.92%, reflecting steady Fed rate expectations.
The Federal Reserve has kept interest rates unchanged throughout 2025, signaling a wait-and-see approach as officials assess the impact of tariffs and broader inflation trends.
Crypto, Gaming Stocks Defy Market Gravity
One of the more surprising moves came from SharpLink Gaming, whose stock surged 19.5% Friday and is up 1,308% on the week. The marketing firm, which serves sportsbooks and casinos, announced a plan to raise $425 million to invest in Ethereum-based cryptocurrency gaming projects.
Global Markets Mixed
- European stock indexes showed mixed performance, reflecting caution as investors digest the implications of U.S. trade decisions and European economic data.
- Asian markets slipped, dragged down by concerns about U.S.-China trade friction and local growth slowdowns.
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