The U.S. stock market showed mixed results on Wednesday, May 15th. Despite continued strength in the technology sector, the Dow Jones Industrial Average fell for the second consecutive trading day, reflecting growing investor concerns over the sustainability of the current rally.
Diverging Major Index Performances
The Dow declined by 89.37 points, or 0.21%, to close at 42,051.06. The S&P 500 rose by 6.03 points, or 0.10%, to 5,892.58. The Nasdaq performed strongly, closing up 136.72 points, or 0.72%, at 19,146.81.
Technology Stocks Shine
The technology sector saw widespread gains. Chip giant Nvidia rose more than 3% following news that it would deliver 18,000 advanced AI chips to Saudi Arabia. Another semiconductor giant, AMD, increased by more than 4% after the company announced a stock buyback plan worth up to $6 billion.
Strong Weekly Performance but Increasing Market Discrepancies
Despite the mixed signals on Wednesday, U.S. stocks have performed notably well this week. So far, the S&P 500 has climbed over 4% this week and has moved from a loss to a gain since the start of the year. The Nasdaq has surged more than 6% this week, while the Dow has gained about 1%.
Easing U.S.-China Tariffs Boost Confidence
Market confidence has largely stemmed from easing U.S.-China trade tensions. This week, both sides reduced tariffs on goods, significantly alleviating previous high-tariff tensions. Adam Turnquist, chief technical strategist at LPL Financial, noted that although the final tariff rates remain uncertain, investors are clearly encouraged by the temporary tariff agreement between the U.S. and China.
eToro global market analyst Lale Akoner pointed out that market risk appetite has significantly risen, even though structural issues remain unresolved. The "avoid escalation" signals from the two major economies have visibly lifted sentiments.
Traders and Strategists Remain Cautious
Despite the strong rebound, many traders are concerned that the current rally may have peaked. Especially after the Trump administration announced an "equal tariffs" policy, expectations for rising import costs and their inflationary impacts have increased.
Mark Haefele, UBS's chief investment officer, downgraded the rating of U.S. stocks from "attractive" to "neutral," stating that the rapid gains over the past month were the main concern, rather than adopting a pessimistic view of the market.
Goldman Sachs strategist Peter Oppenheimer also warned that U.S. stocks face downside risks if economic data worsen or recession fears re-emerge. Meanwhile, Frederic Neumann, HSBC’s Chief Asia Economist, noted that the U.S. continues to face hurdles in negotiations with major trading partners, with long-term prospects remaining unclear.
Focus on Powell's Speech and Fed Stance
The Federal Reserve has expressed concerns about economic uncertainty and stated it will continue to monitor the impact of trade policies on inflation and growth before deciding on future monetary policy. Market participants are keenly watching what signals Fed Chair Jerome Powell will send in his speech on Thursday.
Overall, the robust performance of tech stocks has temporarily supported the rebound of U.S. stocks, but the market remains highly sensitive to policy risks, economic outlook, and trade dynamics.
