US Stock Exchanges Weekly Bulletin 26 May 2025

S&P 500 Tests Critical Average: Where Are Markets Headed?

Global markets are signaling a rebound this week following last week's pressured run. The correction in the S&P 500 index and Trump's postponement of the trade threat to the European Union instilled short-term hope in investors. However, technical indicators still suggest that caution should be exercised.

📊 Technical Status of Indices and Participation Problem

• The S&P 500 retreated 2.5% last week after rising 20% from its April 7 trough, pulling back to its 200-day simple moving average.
• This technical level is called “throwback”, and the old resistance, which has been retested, can serve as a new support.
• However, if this falls below the average, the selling pressure may increase, which could lead to a weakening of the market again.
• The proportion of stocks trading above the 200-day average in the S&P 500 fell to 49.4%. The same ratio fell 33.10% on the Nasdaq and 29.92% in the Russell 2000.
• This suggests that overall index performance is underpinned by a small number of stocks and the upside is structurally fragile.

📉 Moody's Note Discount: Bond Interest and Budget Concern

• Moody's downgraded the U.S. credit rating, noting its budget deficit and debt levels, which raised bond rates.
• The yield on 30-year U.S. bonds exceeded 5.1%, reaching the highest level since 2008.
• This development suggests that the government's approved spending packages could dramatically increase the cost of borrowing.
• The sell-off in the bond market also reflected negatively on equity markets in the first place.
• But individual investors took the pullback as a buying opportunity.

🤝 Individual and Institutional Investor Reactions Differ

• U.S. stocks were bought by individual investors for $4.1 billion on Monday.
• This went on record as the largest single-day individual investor buy ever.
• Declining technology stocks such as Bitcoin ETFs, Tesla, Palantir received intense attention.
• Individual investors accounted for 36% of the total trading volume, a new record rate.
• But institutional investors sold net for the first time in six weeks, with the bulk of the $9.4 billion outflow coming from U.S. stocks.

🌍 Trump's Trade Policy and Europe Move

• Trump postponed the 50% EU tariff he would launch on June 1 until July 9, a decision that prompted a quick rebound in futures.
• Investors are now starting to price Trump's “threat first, then softening” strategy more quickly.
• Talks with European Commission President Ursula von der Leyen show that negotiations are ongoing.
• The exits, which have forced tech giants such as Apple and Samsung to move their production to the United States, are adding to the sectoral pressure.
• The dollar fell to its lowest levels in two years as uncertainty and bond demand weakened.

🧪 Gold Prices: An Effort to Stay Strong in the Shadow of Risks

• Trump's statements and the weak dollar were among the key factors supporting gold.
• Russia's attacks on Ukraine and Trump's “absolutely crazy” statement towards Putin have raised tensions.
• The emergence of possible new US sanctions has also raised geopolitical risks.
• China's gold imports from Hong Kong have doubled, indicating a significant increase in physical demand.
• Citi raised its 0-3 month gold target from $3,150 to $3,500.

📈 Weekly Watch List: Apple, Nvidia, US Steel and Quantum

• Apple: The share price is under pressure after Trump's call to CEO Cook to “manufacture in the USA”. The cost of transporting production to the United States can be as high as $3,500.
• Nvidia: A big fluctuation is expected ahead of the balance sheet, which will be released on May 28. Although Wall Street is forecasting a 44% profit increase, the results that may be below expectations could lead to a sell-off in the stock.
• Quantum Shares: Companies such as IonQ, D-Wave, Rigetti made strong debuts. The Nvidia balance sheet could reignite this segment.
• U.S. Steel: Trump's announcement of the Japanese Nippon Steel partnership caused the stock to rise 21%. This partnership is seen as a strong message to the industry voter ahead of the election.

🧠 Expert Review

Although there is a partial recovery in the markets thanks to positive news flow in the short term, technical indicators and fundamental risks such as Moody's downgrade remain relevant. While the shift towards safe havens such as gold draws attention, Nvidia's balance sheet in tech stocks could be a decisive new direction. In the medium and long term, U.S. budget discipline, interest rate policy, and foreign trade strategies will continue to determine investor decisions.

✅ Take Action

Traders who correctly analyze market dynamics in this critical week can seize opportunities early. In particular, keep an eye on the impact of balance sheet statements and geopolitical developments on the markets.
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🛑 Disclaimer

This content is created by Investment Desk AI and does not constitute investment advice. You should make your decisions based on your own research and expert advisors.

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