Weekend Update, May 27th, 2025
Stall Then Up
Index, Sector & Asset Performance
V-Bottoms are made: Investors, this is nearly exactly what V-bottoms the last 30 years look like. The S&P 500 breaks its 200-day moving average on an event, this time the Trump tariff proclamation. The event elicits a response fiscally or monetarily, and the market regains the 200-day MVA nearly exactly 2 months to the day of its initial breakdown. Moreover, the S&P 500 would regain the level it first broke the 50-day within 3 months. Call that one 6000-6010 by May 30-June 3rd/5th. From there, the index has gained about 1.5% per month for a couple more months. Triangulating all that would come to a new ATH near or above 6200 into early August. Let’s say the 4th-8th.
The S&P 500 stalled and fell -2.6% last week, pushing the index back into the red for the year, amid a fresh round of tariff threats from the Trump administration threatening both Apple and the EU on Friday. Over the weekend, DJT pushed that deadline back out, causing the futures to regain over half of last week’s losses before the market opened. The S&P500 is positive for May with a month-to-date gain of +4.2%, but it is now down -1.3% for 2025.
All S&P 500’s sectors fell last week. The energy sector had the biggest percentage drop, down -4.4%, followed by a -3.5% decline in technology, a -3.3% drop in real estate and losses of -3.1% each in consumer discretionary and financials. Consumer staples dropped the least.
Phillips 66 (PSX) was the energy sector’s hardest-hit name, dropping -10% as the oil refiner’s shareholders voted for two Elliott Investment Management nominees to the company’s board.
Shares of solar companies, which had soared for a few weeks on short covering, dropped as US House Republicans passed a tax bill that eliminates important clean energy credits. Among the decliners, shares of Enphase Energy (ENPH) fell -21% and First Solar (FSLR) lost -11%. Nuclear-linked names soared 5-40% on the White House expediting nuclear energy initiatives. In real estate, decliners included shares of Weyerhaeuser (WY), which fell -5.6% as the company said it has agreed to purchase nearly 117,000 acres of timberlands in North Carolina and Virginia from Roanoke Timberlands for $375 million.
Interest rates shot up on Wednesday due to fears about the US fiscal outlook and demand for government debt after a weak 20-year auction. Rates fell towards the end of the week. The 2-year US Treasury yield ended the week at 3.99%, while the 10-year yield was up to 4.51%.
Economic Indicators and Earnings Commentary
The US House of Representatives passed its reconciliation bill, which extends expiring tax cuts, enacts new tax cuts, and reduces spending. It also includes a $4 trillion increase in the US debt ceiling.
The Citi Economic Surprise index is turning up from negative to low double digits. US services PMI rose by more than consensus expected in May, up from 50.8 to 52.3. The manufacturing PMI also increased, rising from 50.2 to 52.3. Tariff-induced economic pull-ins in 2Q or more soft landing? Time will tell in the 3Q25.
All eyes will be on NVIDIA (NVDA), Salesforce (CRM), and Costco (COST), while key updates from Dell (DELL), HP (HPQ), Marvell Technology (MRVL), Zscaler (ZS), and C3.ai (AI) will offer insights into enterprise demand and AI adoption. Retail and consumer names set to report include Best Buy (BBY), Ulta Beauty (ULTA), and Abercrombie & Fitch (ANF).
Commodities and Currencies
Oil prices fell last week after reports that OPEC+ is ready to raise output by 411,000 barrels per day for July despite weaker demand for fossil fuels.
The US dollar index ended the week down –1.97%.
Gold rose after the credit rating of US Treasuries was downgraded by Moody’s.
Bitcoin had a sharp rally, climbing to over $108,000, the highest level ever.
Oak Harvest Weekly Stock Talk
From Panic to Peak: Why Market Cycles Say New ATH’s in Summer Would Be the Norm
Past performance is no guarantee of future results. Indexes are unmanaged and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges. The preceding discussion is for informational purposes only. Investing involves risk and no reference to any security listed above should be considered a buy or sell recommendation. Advisory services are provided through Oak Harvest Investment Services, LLC, a registered investment adviser.
