Well, well, well. If you thought the stock market couldn’t get more entertaining than a reality TV show, the final week of May 2025 proved you delightfully wrong. Between Memorial Day barbecues and month-end portfolio rebalancing, Wall Street managed to squeeze in enough drama to make a soap opera writer jealous.
The Weekly Scorecard: Up, Down, and All Around
Let’s start with the numbers, shall we? Because nothing says “stable investment environment” quite like watching major indices swing like a pendulum in an earthquake:
- S&P 500: Closed the week slightly lower (-0.14% on Friday), but still managed to post a magnificent 6.2% gain for May – its best monthly performance since November 2023
- Dow Jones: Showed similar resilience, ending May with a solid gain despite Friday’s minor wobble
- NASDAQ Composite: The tech-heavy index flexed its muscles with a spectacular 9.6% monthly surge, apparently deciding that AI chips are the new gold
The Tariff Tango: Trump’s Greatest Hits
Ah, President Trump. The man who treats tariff announcements like a DJ mixing tracks at a nightclub. This week’s playlist included:
Monday, May 26: Markets closed for Memorial Day, giving investors a brief respite from the chaos. Even the stock market needs a burger and a beer sometimes.
Tuesday, May 27: The Dow rocketed up 740 points (1.78%) after Trump graciously decided to delay his threatened 50% EU tariffs until July 9. Because nothing says “stable trade policy” like changing your mind faster than a teenager picking an outfit. The S&P 500 surged 2.05%, and the Nasdaq jumped 2.47%. Investors, displaying the memory of goldfish, celebrated like it was 1999.
Wednesday, May 28: Reality check! Stocks retreated as investors remembered that Nvidia still had to report earnings. The market held its breath like a teenager waiting for college acceptance letters.
Thursday, May 29: Nvidia delivered! The AI chipmaker’s strong results provided some relief, though concerns about rising bond yields and the ballooning deficit kept enthusiasm in check. The S&P 500 essentially went nowhere, proving that even good news can’t always overcome existential dread.
Friday, May 30: The week ended with a whimper as Trump complained that China wasn’t adhering to trade agreements. Shocking, we know. The S&P 500 and Nasdaq fell slightly but still locked in their best monthly gains since 2023. It’s like winning a marathon despite tripping over your shoelaces every mile.
High-Flying Heroes and Basement Dwellers
The Winners Circle:
- Constellation Energy (CEG): Up 37% for the month, because apparently, AI needs a lot of electricity
- Super Micro Computer (SMCI): Gained 26% in May, riding the AI wave like a surfer in Hawaii
- Nvidia (NVDA): Added 24% for the month, proving that being the dealer in the AI gold rush is quite profitable
- Tesla (TSLA): Surged nearly 23%, as Elon Musk’s dance with the Trump administration became more complicated than a telenovela plot
The Losers Lounge:
- Energy Sector: Continued its slide, with the sector down significantly as oil prices remained under pressure
- Bond Proxies: Rising yields made these about as popular as a vegetarian at a Texas BBQ
- Apple (AAPL): Still struggling with tariff concerns, though it managed to avoid complete disaster
The Uncertainty Chronicles
If you’re looking for certainty in this market, you might want to try fortune cookies instead. The key uncertainties plaguing investors include:
- Tariff Roulette: Will Trump’s July 9 EU deadline result in a deal or another Twitter-storm of threats?
- China Relations: The trade talks are “a bit stalled,” according to Treasury Secretary Bessent. In diplomatic speak, that’s somewhere between “mildly concerning” and “hide your portfolio.”
- Federal Deficit: The Republican budget bill has investors more worried than a long-tailed cat in a room full of rocking chairs
- Interest Rates: The Fed remains as mysterious as ever, with markets pricing in rate cuts sometime before the heat death of the universe
Trump’s Market Musings
Our Commander-in-Tweet had plenty to say about the market this week:
- On Truth Social, he assured everyone to “BE PATIENT!!!” regarding the economic boom he promises is coming. All caps included, because subtlety is for losers.
- He blamed the early-year market troubles on “Biden’s Stock Market,” conveniently forgetting that presidential policies typically have lag effects measured in geological time
- His negotiation strategy continues to resemble a game of poker where everyone can see his cards, but he insists he’s winning
Has the Market Topped Out?
The million-dollar question (adjusted for inflation, of course): Has the market topped out in the short term?
The evidence is mixed, like a cocktail made by a blindfolded bartender:
- Bullish signals: Strong monthly gains, positive breadth, and tech leadership suggest momentum remains but recent action has lagged.
- Bearish concerns: VALUATIONS, Rising yields, deficit fears, and the ever-present tariff uncertainty create headwinds
- Technical picture: The S&P 500 sits just 3.6% below its February all-time high, having recovered remarkably from April’s 18.9% plunge
Bear Market Rally or New Bull Run? The $6 Trillion Question
Here’s where things get spicy. Is this spectacular May rally the start of a glorious new bull market, or just a bear market rally dressed up in a bull costume for Halloween?
Let’s examine the evidence like detectives at a crime scene where the victim is investor confidence:
The Bear Market Rally Case:
- Volume Anemia: Rally volumes have been lighter than a feather in a vacuum chamber
- Narrow Leadership: When a handful of AI stocks are carrying the entire market like Atlas carrying the world, sustainability becomes questionable.
- The Fed Factor: With the Federal Reserve still playing hard-to-get on rate cuts, this rally might be running on fumes and false hope
- Technical Resistance: We’re still knocking on the door of previous highs without convincingly breaking through
- Sentiment Whiplash: The rapid swing from apocalyptic despair to euphoric optimism screams “bear market rally” louder than a heavy metal concert
Look Familiar? Case for a Bear Market Rally Historical Déjà Vu: We’ve Seen This Movie Before
Here’s the kicker that should make every investor’s spider-sense tingle: This spectacular 30%+ rally from the April lows mirrors some of history’s most notorious bear market rallies with eerie precision. Let’s take a stroll down memory lane, shall we?
The 2022 Bear Market Rally
- Summer 2022 saw the S&P 500 surge 17% from June to August lows
- Investors convinced themselves the Fed was done hiking
- Reality check: The Market proceeded to make new lows by October
The 2008-2009 Financial Crisis
- November 2008: S&P 500 rallied 24% in just five weeks
- Everyone thought the worst was over after the bailouts
- Plot twist: The Market plunged another 28% to the March 2009 bottom
The 2000-2002 Dot-Com Bust
- Multiple 20%+ rallies occurred during the bear market
- April-May 2001: Nasdaq surged 40% in eight weeks
- Spoiler alert: It then lost 50% over the next year
The 1973-1974 Bear Market
- July-October 1973: S&P 500 rallied 15%
- March-July 1974: Another 23% surge had investors celebrating
- The punchline: The Market still had another 25% to fall
The Grandfather of All – 1929-1932
- November 1929-April 1930: The market rallied nearly 50%
- Investors famously declared the crisis over
- The aftermath: An 86% total decline from the 1929 peak
What do all these rallies have in common? They occurred while the Fed was still tightening or before it meaningfully eased, economic fundamentals were deteriorating, and investors mistook relief for resolution. Sound familiar? It should, because we’re watching the same script play out with better special effects and more tweets.
The New Bull Run Case (For the Optimists)
- Momentum Building: Six straight weeks of gains suggest more than just a dead cat bounce
- Breadth Improvement: Market participation has broadened beyond just tech
- Earnings Resilience: Companies like Nvidia are still delivering, despite the chaos
The Verdict
In this analyst’s humble (okay, not so humble) opinion, we’re witnessing a classic bear market rally – a spectacular but ultimately doomed romance between hope and reality. Why? Because sustainable bull markets typically don’t begin until the Federal Reserve capitulates and starts cutting rates like a sushi chef at an all-you-can-eat buffet.
The Fed remains as stubborn as a mule in molasses, with markets pricing in the first rate cut somewhere around September. Until we see the whites of Jerome Powell’s rate-cutting eyes, this rally – impressive as it may be – likely represents the market’s sugar high before the inevitable crash diet.
Think of it this way: We’re at the party at 2 AM, everyone’s having a great time, but the lights are about to come on, and reality is going to look a lot different. The real bull market? That’s scheduled for after the Fed’s intervention, probably sometime when pigs fly or politicians agree on something.
TLDR, The Bottom Line
The time will come. Smart money has not returned, the market has not retested the bottom and valuations are again near all time highs and smart money is like Houdini. I am not a complete bear! Wage growth and low unemployment (although it should go a little higher will sustain the market eventually because U.S Consumers do spend. Bull markets normally are not sustainable solely based on tweets. I made my case for a bear market rally. If you failed to read it closely you should! There is a storm on the horizon with dark clouds. I expect weaker economic data in the next 30-90 days, earnings forecast have been lowered for the 2nd quarter, for those that gave a forecast. AND TARIFF UNCERTAINTY REMAINS!. For now the market has priced in what they believe year end tariffs will be and valuations again are near all time highs. I do believe we will have a strong market this year but now is not the time. I expect strength (smart money to return) either as soon as the federal reserve signals lower interest rates or tariffs come in much lighter than anyone expects. Bull markets don’t set new highs with smart money sitting on the side lines and money flows leaving equities for foreign markets.
If this week taught us anything, it’s that the stock market in 2025 has the attention span of a caffeinated squirrel and the emotional stability of a teenager in love. We’ve gone from “economic nuclear winter” warnings in April to the best monthly gains in over a year, all while playing trade-war ping-pong with most of our major trading partners.
For investors, the lesson is clear: Keep your seatbelts fastened, your portfolio diversified, and maybe keep some antacids handy. Because if the last week of May is any indication, this market roller coaster isn’t stopping at the station anytime soon.
As we head into June, remember: In Trump’s market, the only certainty is uncertainty, and the only constant is change. Oh, and tweets. There will always be tweets.
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