It’s no wonder, then, that whiplashed investors have few ideas about what to expect next. Wall Street is also in the fog. As Deutsche Bank’s global head of macro research, Jim Reid, wrote this morning, “It really is hard to keep up. Trading and analysing this market successfully requires a lot of luck. Unless of course I get it right and then it’s skill.”
Investors showed their indecision in premarket trading Friday, as they awaited the release of the Fed’s preferred inflation gauge, the personal consumption expenditures (PCE) index.
Taking a step back, though, May will be a banner month for stocks.
At the close of Thursday trading, the S&P 500 was up 6.2% for the month, while the Nasdaq has jumped 10% in the same period, and the Dow has risen about 4%. These rises leave all three close to even for the year, leaving investors back at the start line.
But while markets boomed in May, and are back at the waterline for the year, Wall Street analysts are asking if the sound and fury of the first five months of 2025 has made markets more uncertain than ever.
“There is yet more uncertainty in the U.S. economy,” UBS chief economist Paul Donovan wrote this morning. “U.S. President Trump appealed the ruling that their trade taxes were illegal. While this is decided, the taxes stay.
“There are thus three layers of uncertainty. Will the taxes survive? If they are illegal, will U.S. companies and consumers get refunds? And are trade taxes today actually being collected? There is also uncertainty around how U.S. companies will react to this uncertainty, especially with pricing.”
Here’s a snapshot of today’s action prior to the opening bell in New York:
