Review of the Week of May 5–9, 2025: Financial Leaders
Overview
The week of May 5-9, 2025, was marked by heightened market activity driven by the Federal Reserve’s interest rate decision, President Trump’s ongoing policy rhetoric, and optimism surrounding U.S.-China trade negotiations. Equity markets experienced volatility, with the S&P 500 navigating a historic winning streak before midweek losses. Safe-haven assets like gold saw sharp gains early in the week, while cryptocurrencies, particularly Bitcoin and Ethereum, surged on trade deal hopes. Corporate earnings provided mixed signals, with strong performances from Disney contrasting Tesla’s challenges. The week underscored the market’s sensitivity to monetary policy and geopolitical developments.
Financial Markets Weekly Recap
Equities
Market Indices: The S&P 500 (SPY) marked a historic milestone early in the week, achieving its longest winning streak in 20 years. However, it recorded back-to-back losses midweek as traders adopted a cautious stance ahead of the Fed’s rate decision. By Friday, futures stabilized following President Trump’s public encouragement to “buy stocks now.” The Nasdaq Composite (QQQ) and Dow Jones Industrial Average (DIA) followed similar patterns, with tech-heavy indices showing resilience despite midweek dips.
Sector Performance: Technology and entertainment sectors outperformed, driven by strong corporate earnings. Semiconductor and AI-related stocks remained focal points for investors, while automotive stocks faced pressure due to Tesla’s declining European market share.
Corporate Highlights:
- Disney (DIS): Shares surged 6% after reporting a surprise earnings beat, with Q1 revenue exceeding expectations and strong performance in its streaming and theme park divisions.
- Tesla (TSLA): Stock declined after reports highlighted a 37% year-over-year drop in European market share, raising concerns about competitive pressures despite optimism for its low-priced electric vehicle.
- Berkshire Hathaway (BRK.A): Warren Buffett announced plans to step down as CEO, with key takeaways from the company’s annual meeting emphasizing succession planning and continued focus on long-term value creation.
Currencies
- U.S. Dollar: The dollar gained strength post-Fed decision, with the EUR/USD pair retreating as Fed Chair Powell reiterated that rates would remain unchanged, despite President Trump’s public criticism labeling him a “fool.” The USD/JPY pair snapped a three-day losing streak, supported by stabilizing market sentiment.
- Euro: The euro weakened against the dollar, reflecting reduced safe-haven demand as trade tensions eased.
- Yen: The Japanese yen saw early safe-haven inflows but later stabilized as risk-on sentiment returned with trade deal optimism.
Commodities
- Gold (XAUUSD): Gold prices surged nearly 5% to $3,465 per ounce early in the week, driven by safe-haven demand ahead of the Fed’s meeting. Prices later moderated as trade deal optimism reduced the need for hedges, ending the week around $3,400 per ounce.
Cryptocurrencies
- Bitcoin (BTC.X): Bitcoin rallied from $95,000 to break $104,000 by week’s end, fueled by Fed Chair Powell’s press conference and growing optimism for a U.S.-China trade deal. Traders are eyeing $100,000 as a key psychological level.
- Ethereum (ETH.X): Ethereum surged 25% to $2,300, reflecting broader crypto market enthusiasm tied to improved risk sentiment.
Economic Indicators and Policy Developments
- Federal Reserve Decision: The Fed held interest rates steady, ignoring President Trump’s calls for rate cuts. Powell’s press conference emphasized data-driven policy, sparking renewed crypto enthusiasm while equities erased daily gains.
- Trade Developments: Optimism for a potential U.S.-China trade deal gained traction, boosting risk assets like cryptocurrencies and equities while reducing demand for safe-haven assets like gold and the yen.
- Economic Data: Investors awaited upcoming releases, including the Personal Consumption Expenditures (PCE) inflation gauge and nonfarm payrolls, for further insights into inflation and labor market trends.
Market Performance Summary
The week was a dynamic mix of volatility and recovery, with the Federal Reserve’s rate decision and U.S.-China trade deal optimism shaping market movements. Equities navigated midweek losses but stabilized by Friday, while gold and cryptocurrencies reflected shifting risk sentiments. Corporate earnings provided key highlights, with Disney outperforming and Tesla facing challenges. The U.S. dollar’s strength underscored the Fed’s steady policy stance, despite political pressures.
SPY in downward trend: price expected to drop as it breaks its higher Bollinger Band on May 12, 2025
SPY broke above its upper Bollinger Band on May 12, 2025. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options. The A.I.dvisor looked at 36 similar instances where the stock broke above the upper band. In of the 36 cases the stock fell afterwards. This puts the odds of success at .
Technical Analysis (Indicators)
Bearish Trend Analysis
The 10-day RSI Indicator for SPY moved out of overbought territory on May 21, 2025. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 45 similar instances where the indicator moved out of overbought territory. In of the 45 cases, the stock moved lower in the following days. This puts the odds of a move lower at .
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In of 67 cases where SPY's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are .
The Momentum Indicator moved below the 0 level on May 30, 2025. You may want to consider selling the stock, shorting the stock, or exploring put options on SPY as a result. In of 71 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for SPY turned negative on May 28, 2025. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 52 similar instances when the indicator turned negative. In of the 52 cases the stock turned lower in the days that followed. This puts the odds of success at .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where SPY declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
Bullish Trend Analysis
SPY moved above its 50-day moving average on May 01, 2025 date and that indicates a change from a downward trend to an upward trend.
The 10-day moving average for SPY crossed bullishly above the 50-day moving average on May 07, 2025. This indicates that the trend has shifted higher and could be considered a buy signal. In of 14 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where SPY advanced for three days, in of 365 cases, the price rose further within the following month. The odds of a continued upward trend are .
The Aroon Indicator entered an Uptrend today. In of 434 cases where SPY Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
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