Economic Data and Market Highlights
Markets are moving on a mix of policy shifts, investor psychology, and speculative flows. This week, attention turned to a series of developments that cut across trade, regulation, sentiment, and digital assets—all of which carry implications for positioning heading into mid-May. The S&P 500 declined slightly, down 0.45%, as global equities fell 0.19%.
The Fed announced that they were making no changes to rates. Market expectations show a possible rate cut later this year. Inflation continues to be stick with tariffs causing concern over future increases. Cleveland’s Fed President Beth Hammack noted a lack of clarity regarding when inflation will decline. Further noting that some goods manufactured in the US are also seeing price increases.
The week kicked off with a market-friendly breakthrough on global trade: the U.S. and U.K. appeared to have finalized a new agreement that preserves a 10% tariff on imports, which is lower than initially expected, and eases restrictions on steel and aluminum. In return, the U.K. is expected to scale back its 2% digital services tax, a relief for U.S. tech giants. Final details will be announced on Monday. Trade representatives, including US Treasury Secretary, also began negotiations with China in Switzerland, which are taking place at the time of this writing.
While still negative, the AAII Investor Sentiment Survey turned sharply higher.
In the tech space, the Trump administration rescinded the controversial “AI diffusion rule” from the Biden era, which had sought to restrict exports of high-performance AI chips. Semiconductor names like Nvidia responded positively, hoping that access to foreign markets would remain intact. However, regulatory uncertainty persists. Analysts warn that national security concerns could re-emerge in future rulemaking, leaving chipmakers exposed to sudden policy shifts.
Meanwhile, Bitcoin has surged back above $100,000, its highest in three months. The move is driven by renewed ETF inflows, growing interest from institutions, and speculation that central banks could begin accumulating crypto as a hedge against geopolitical and currency risks. The rally has lifted crypto-exposed equities but also raises questions about capital rotation out of traditional assets. Volatility remains high, and Bitcoin’s role as a durable store of value continues to divide market participants.
The Past Week’s Notable US data points (with revisions)
The Upcoming Week’s notable US data points
The Past Week’s Notable US data points (with revisions)
The Upcoming Week’s notable US data points
Source: Morningstar
Data Source: Financial News London, Financial Times, Morningstar, MarketWatch, Standard & Poor’s, and the Wall Street Journal.
Authors:
Jon Chesshire, Managing Director
Michael McNamara, Analyst