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Tuesday Afternoon Coffee - Markets Update - 20 May 2025 - Air Travel Woes Weigh on Airlines; Dollar Slides, Gold Surges as Fed Signals Caution
- The Trade Academy Team
- May 20
- 3 min read
Markets Update: U.S. markets slipped modestly Tuesday as turbulence in the airline sector and a weakening U.S. dollar kept investors on edge. Real estate stocks lagged while utilities led gainers.
Global Markets Roundup: 20 May 2025
Crude oil and bitcoin ticked higher, and gold soared over 2% as Federal Reserve officials struck a cautious tone and global uncertainty persisted.
Main U.S. Indexes:
Dow Jones Industrial Average: -89.14 points (-0.23%)
S&P 500: -5.78 points (-0.11%)
Nasdaq Composite: -3.25 points (-0.02%)
Airlines Struggle Amid Control Glitches, Soft Travel Demand
U.S. commercial carriers faced fresh headwinds as the Transportation Security Administration (TSA) reported a 1% drop in passenger throughput compared to the same period last year, despite falling airfares. Technical glitches and staffing shortages at Newark International Airport—mirrored to a lesser degree across the country—have triggered widespread delays and cancellations.
These issues are now under investigation by the Federal Aviation Authority (FAA) and come amid calls for a major overhaul of the air traffic control system by Transportation Secretary Sean Duffy. Additionally, new "real ID" security requirements that took effect May 7 have complicated passenger flow, while a 7% projected decline in international tourism to the U.S. for 2025—tied to stricter border policies and geopolitical tensions—has added further pressure on the airline industry.
Dollar Weakens as Fed Officials Warn of Stagflation Risks
The U.S. dollar fell to a two-week low against the yen amid cautious remarks from Federal Reserve officials and ongoing uncertainty around President Trump's proposed tax overhaul. Traders are also closely watching this week's G7 meeting, where U.S.-Japan talks could touch on currency policy.
Gold Hits New Peak as Investors Flee to Safety
Gold rallied 2% to above $3,285 per ounce as investor sentiment soured on the dollar and geopolitical risks escalated. The metal has seen strong demand amid persistent concerns over stagflation and global instability.
Treasury Yields Steady
The 10-year U.S. Treasury yield was largely unchanged at 4.48%, capping recent volatility amid mixed inflation data and Fed policy uncertainty.
Commodities Mixed; Cocoa and Grains Rally
Oil prices held firm as OPEC+ prepared to boost output by 411,000 barrels per day on June 1. However, easing demand due to trade tensions is capping gains.
WTI Crude (June): -$0.13 to $62.56/barrel
Brent Crude (July): -$0.10 to $65.44/barrel
Cocoa futures surged past $11,000/tonne, their highest since January 30, driven by speculative buying and persistent supply fears.
Grain markets were also buoyant, with wheat hitting its highest level in over two weeks.
Soybeans (ZS1!): +2¼ cents to $10.53/bushel
Corn (ZC1!): +7 cents to $4.54½/bushel
Wheat (ZW1!): +17 cents to $5.46/bushel
Outlook
Investors remain focused on Washington, where a pivotal House vote on Trump's tax package could set the tone for markets heading into summer. Meanwhile, the air travel sector may continue to struggle under the combined weight of systemic disruptions and faltering demand.
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
