Market Momentum in May 2025: S&P 500 Extends Rally Amid Strong Weekly Gains and Mixed Sector Performances

Major U.S. Stock Indexes Post Robust Weekly Advances While UnitedHealth Surges After DOJ Probe News

Overview: U.S. Markets Close on a High Note, Continuing Winning Streak

The U.S. stock market concluded a week marked by significant upward momentum, with major indexes closing solidly higher on Friday, reinforcing notable weekly gains.

This marks the third instance in the past four weeks that broad market benchmarks have posted substantial advances, signaling renewed investor optimism.

The Dow Jones Industrial Average rose by 0.8%, while the S&P 500 increased by 0.7%. Meanwhile, the tech-heavy Nasdaq Composite added 0.5%, with each index closing near session highs.

This positive finish followed a mixed performance on Thursday, when the S&P 500 achieved its fourth consecutive daily gain, but the Nasdaq broke a six-day winning streak with a slight decline.

Trade Optimism Fuels Early Week Rally

Investor sentiment received a significant boost at the start of the week after the United States and China jointly announced a 90-day reduction in tariffs imposed on each other’s goods.

This temporary tariff truce is intended to provide breathing room for ongoing negotiations toward a more comprehensive trade agreement, alleviating longstanding trade tensions that have weighed on global markets.

In addition, several key economic indicators released throughout the week have bolstered confidence in the underlying strength of the U.S. economy.

Despite this, concerns persist regarding the longer-term implications of tariffs on economic growth and corporate profitability.

Weekly Performance Snapshot: Tech Leads the Charge

The Nasdaq outperformed this week, gaining 7.2%, as investor enthusiasm for technology stocks reignited alongside a growing appetite for risk assets.

The S&P 500 posted a robust 5.3% increase, while the Dow Jones rose 3.4%.

These gains represent the strongest weekly performances since early April, when President Donald Trump’s decision to pause certain “reciprocal” tariffs led to a market rebound after a sell-off earlier that month.

UnitedHealth Group Leads S&P 500 Advance Following Volatility

Among individual stocks, UnitedHealth Group (UNH) was a standout performer, surging more than 6% on Friday.

This rebound came after the stock plunged 11% on Thursday amid reports of a Department of Justice criminal investigation into the company’s Medicare practices.

Despite recent volatility driven by the investigation and the resignation of CEO Andrew Witty, UnitedHealth’s recovery on Friday reflected some investor confidence in the company’s ability to navigate legal challenges and adjust its Medicare Advantage business strategy.

Mixed Bag for Mega-Cap Tech Stocks

Technology sector leaders showed mixed results Friday. Tesla (TSLA) rose 2%, capping a week where its shares climbed 17%.

Alphabet (GOOG) edged up about 1%, while Microsoft (MSFT), Nvidia (NVDA), and Amazon (AMZN) posted modest gains.

Conversely, Broadcom (AVGO) declined nearly 2%, and Apple (AAPL) along with Meta Platforms (META) slipped slightly.

Smaller tech names demonstrated notable activity.

Super Micro Computer (SMCI), a server manufacturer, jumped 5% on Friday, contributing to a remarkable 44% weekly gain.

Chip designer Advanced Micro Devices (AMD) rose nearly 2%, buoyed by positive news regarding corporate deals and an expanded share buyback program.

However, Applied Materials (AMAT), a chip equipment supplier, dropped over 5%, leading S&P 500 decliners after reporting quarterly revenue below Wall Street expectations amid weak sales in China.

Pharmaceutical Sector Impacted by CEO Departure

Novo Nordisk (NVO) shares declined nearly 3% following the surprise announcement that CEO Lars Fruergaard Jørgensen is stepping down.

The Danish pharmaceutical company, known for blockbuster weight-loss medications Ozempic and Wegovy, cited market challenges and share price declines as factors influencing the leadership change.

While the CEO will remain until a successor is appointed, the news injected uncertainty into the stock, which has fallen over 50% in the past year.

Bond Market and Currency Movements

The yield on the 10-year U.S. Treasury note, a benchmark influencing borrowing costs including mortgages, closed at 4.45% late Friday.

This represented a slight increase from an earlier low of 4.39% as Moody’s Investors Service downgraded the U.S. government’s credit rating after market hours.

The U.S. dollar index, which tracks the greenback against a basket of foreign currencies, edged up 0.1% to 100.98.

Meanwhile, gold futures gave back 0.7%, settling at $3,205 an ounce, erasing most of Thursday’s gains.

West Texas Intermediate crude oil prices rose 1.4% to $62.50 per barrel, signaling ongoing strength in energy markets.

Cryptocurrency Update: Bitcoin Climbs Above $100,000

Bitcoin traded near $103,600 in late afternoon on Friday, rebounding from an overnight low of $102,700.

The digital asset recently surged past the $100,000 threshold for the first time since February, reflecting renewed investor interest despite ongoing regulatory scrutiny and market volatility.

Moody’s Downgrades U.S. Government Credit Rating

In a major development impacting global markets, Moody’s Investors Service downgraded the U.S. government’s credit rating from its top-tier Aaa status, citing persistent large fiscal deficits.

The agency projected the national debt would rise from 98% of GDP last year to 134% by 2035, emphasizing the failure of successive administrations and Congress to enact meaningful deficit reduction measures.

Moody’s expressed skepticism that current political discussions will produce significant multi-year spending cuts, noting that increasing deficits and interest costs will place further strain on the government’s fiscal health.

This downgrade aligns Moody’s with similar moves by S&P Global and Fitch Ratings, which collectively influence borrowing costs and investor perceptions.

Recent Weekly Market Trends and Performance

The Dow Jones, S&P 500, and Nasdaq Composite all experienced strong weekly gains, rebounding from prior modest losses and recording the best weekly performances since early April.

• Dow Jones: Gained 3.4%

• S&P 500: Increased 5.3%

• Nasdaq Composite: Jumped 7.2%

With these advances, the Dow and S&P 500 have returned to positive territory for 2025, while the Nasdaq remains slightly negative year-to-date.

Tesla’s Stock Continues Fourth Consecutive Week of Gains

Tesla’s shares rallied 2% on Friday to close just below $350, completing a fourth consecutive week of gains totaling 17%.

However, the stock remains down approximately 13% since the start of the year.

Positive macroeconomic factors such as the U.K.-U.S. trade deal and the temporary U.S.-China tariff reduction have helped offset concerns about Tesla’s declining sales in China and Europe.

Despite recent brand challenges linked to CEO Elon Musk’s political activities, investor anticipation remains high for the company’s forthcoming more affordable vehicle and plans for autonomous paid ride services in Austin, Texas.

UnitedHealth Shares Rebound After Sharp Decline

After plummeting due to DOJ probe news and CEO departure, UnitedHealth’s stock climbed over 6% on Friday, closing near $292.

Despite the rebound, shares have lost roughly half their value over the past month amid mounting healthcare cost pressures and public scrutiny of the insurance industry.

Technical analysis indicates the stock has entered oversold territory with significant institutional selling.

Investors are advised to monitor key support levels around $249 and $212, with resistance near $325 and $365.

Small-Cap Stocks Experience Longest Winning Streak Since 2023

The Russell 2000 index, representing small-cap U.S. stocks, closed its sixth consecutive week of gains—the longest such streak since December 2023.

This rally has been supported by easing trade tensions and improved investor sentiment.

The Russell 2000 recovered losses sustained during the imposition of tariffs under the Trump administration, which disproportionately affected smaller companies with less pricing power and capital access than their large-cap counterparts.

Despite recent gains, small caps trail large-cap indexes year-to-date, with the Russell 2000 down 5% compared to a 1% gain for the Russell 1000.

Nvidia CEO Jensen Huang to Deliver Keynote at Computex

Nvidia’s CEO Jensen Huang is scheduled to keynote Computex on Sunday, an influential technology trade show centered on artificial intelligence (AI) advancements.

The address is expected to showcase Nvidia’s latest innovations and new partnerships, potentially catalyzing further stock gains.

The company’s shares have gained roughly 15% this week amid optimism from new Saudi Arabian partnerships announced during President Trump’s Middle East visit.

Nvidia’s upcoming quarterly earnings on May 28 will also be closely watched.

Take-Two Interactive Reports Mixed Earnings

Take-Two Interactive, the parent company of Rockstar Games and 2K, exceeded revenue expectations in its fiscal fourth quarter but reported a net loss and a disappointing outlook, leading to a 2% share price decline.

The company’s forecast fell short of analyst projections amid delays in the highly anticipated Grand Theft Auto VI release, now pushed to May 2026.

CEO Strauss Zelnick remains confident that upcoming titles will drive future profitability.

Applied Materials Shares Drop Amid Revenue Shortfall

Applied Materials shares declined sharply after quarterly revenue missed estimates, primarily due to weak sales in China.

The stock has experienced significant volatility related to trade policy concerns and recently touched technical support levels, suggesting a potential consolidation phase ahead.

Quantum Computing Surges on Strong Earnings Report

Quantum Computing (QUBT) soared 35% following a profitable quarter attributed to acquisition benefits and increased demand for photonic chips. CEO Dr. Yuping Huang highlighted progress on a quantum photonic chip foundry and growing partnerships, positioning the company for future growth despite the stock’s year-to-date decline.

Cava Group Shares Slide Despite Positive Earnings

Mediterranean fast-casual chain Cava reported strong quarterly sales and earnings growth but saw its stock fall 4% as guidance for restaurant openings and pre-opening costs were revised upward.

JPMorgan analysts maintain a bullish outlook, citing the brand’s resilience amid economic uncertainties.

Novo Nordisk Stock Drops as CEO Steps Down

Novo Nordisk shares declined 4% on news that CEO Lars Fruergaard Jørgensen will step down, citing recent market challenges and share price performance.

The company maintains confidence in its strategy and plans for leadership transition.

AMD’s Stock Poised for Consolidation After Rally

Advanced Micro Devices (AMD) shares retreated slightly after a seven-session winning streak, despite recent share repurchase announcements and partnerships in the AI sector.

Technical indicators suggest potential overbought conditions and a near-term consolidation phase, with key support and resistance levels to watch.

Major Index Futures Slightly Higher

Futures linked to the Dow Jones, S&P 500, and Nasdaq were each up approximately 0.3% in after-hours trading, signaling cautious optimism heading into the next trading session.

Conclusion

The week ending May 16, 2025, has been characterized by solid market gains fueled by easing trade tensions and positive economic data.

While mega-cap tech and healthcare sectors experienced mixed results, overall investor sentiment remains optimistic.

However, Moody’s downgrade of the U.S. credit rating and corporate-specific challenges remind market participants of ongoing risks.

As major tech events and earnings reports loom, market volatility may persist.

Investors are advised to monitor geopolitical developments, monetary policy updates, and earnings releases to navigate the evolving market landscape.