Thursday Afternoon Coffee - Markets Update - 22 May 2025 - Wall Street Flatlines as Debt Bill and Tariffs Weigh on Sentiment

The Trade Academy Team
May 22
3 min read

Markets Update: U.S. markets ended Thursday on a subdued note as investors weighed President Donald Trump’s newly passed tax-and-spending bill against solid economic data and a pullback in Treasury yields. Despite some strength in megacap tech stocks and select consumer names, broader sentiment remained cautious as deficit concerns and trade tensions linger.

Global Markets Roundup: 22 May 2025

Stocks Mixed in Choppy Trade; Nasdaq Outperforms

Equities seesawed throughout the session before giving up most of their gains into the close. The Dow Jones Industrial Average slipped 11.37 points, or 0.03%, to 41,849.07, while the S&P 500 fell 4.89 points, or 0.08%, to close at 5,839.72. The Nasdaq Composite edged up 45.56 points, or 0.27%, to 18,923.23, lifted by strength in AI-linked megacaps and a surge in cloud software shares. Consumer discretionary and communication services led S&P sector gainers, helped by resilience in airlines and tech-adjacent growth stocks. The NYSE FANG+ index also advanced. However, utilities lagged sharply, down 1.4% on the day. Among notable movers, Snowflake soared after raising its fiscal 2026 product revenue outlook, while Alphabet touched a near three-month high. On the downside, Analog Devices dropped despite beating earnings estimates, and solar stocks slumped on expectations the tax bill would curtail green energy subsidies.

Trump Tax Bill Clears House, Faces Senate Scrutiny

Markets digested the narrow 215–214 House passage of Trump’s sprawling 1,000-page tax-and-spending bill, which now heads to the Republican-controlled Senate. The bill, estimated by the Congressional Budget Office to cost $3.8 trillion over the next decade, would fulfill key campaign promises but deepen the U.S. debt load to over $40 trillion by 2035. The passage came just days after Moody’s downgraded the U.S. sovereign rating, citing concerns over mounting fiscal imbalances.

Bond Yields Ease, Dollar Rises

Treasury yields retreated after a recent spike, providing a modest tailwind for equities. The yield on the 10-year U.S. Treasury fell 5.4 basis points to 4.543%, easing from multi-month highs. The U.S. dollar advanced as investors recalibrated their expectations following strong domestic economic data and weaker eurozone PMIs. The Dollar Index DXY rose 0.3% to 99.905, reversing part of a recent decline. The euro EURUSD fell 0.3% to $1.1293, pressured by signs of eurozone contraction, while the yen weakened slightly to 143.75 per dollar. Sterling held steady at $1.3433, and the dollar firmed against the Swiss franc, up 0.5% to 0.8286.

Bitcoin Hits New Record, Gold Slides

Bitcoin extended its rally, hitting a fresh all-time high of $111,965.62, up 3.4% on the day as investors continued to rotate into alternative assets amid growing concerns about U.S. fiscal sustainability. Gold prices pulled back despite easing yields, as dollar strength limited safe-haven demand. August futures fell $23.10 to settle at $3,318.80 per ounce.

Oil Drops on Supply Jitters

Crude oil prices fell over 1% after reports surfaced that OPEC+ plans to increase supply starting in July, unwinding previous voluntary production cuts. West Texas Intermediate (WTI): -$0.41 to $61.16/barrel. Brent Crude: -$0.48 to $64.43/barrel

Grains Mixed on Light Trading

Soybeans extended gains, while corn posted a modest rise. Wheat retreated from a one-month high. Soybeans (ZS1!): +4¾ cents to $10.67½/bushel. Corn (ZC1!): +2 cents to $4.63/bushel. Wheat (ZW1!): -4¾ cents to $5.44½/bushel.

Outlook

With the Senate now set to take up the Trump tax bill and trade tensions still simmering, markets face a potentially volatile stretch heading into the Memorial Day weekend. Friday’s only major data point—new home sales—may offer limited directional guidance amid thin holiday volumes.

Looking forward refer to the economic calendar below to see the upcoming events scheduled for today and the rest of the week.

General news - Information source from multiple newswires.

The article and the data is for general information use only, not advice!

The Trade Academy Team