Soft U.S. inflation data and easing U.S.-China trade tensions boost the S&P 500 and Nasdaq.

Taiwan • Business • 05/13 17:25
Soft U.S. inflation data and easing U.S.-China trade tensions boost the S&P 500 and Nasdaq.

On May 13, 2025, the U.S. stock market rose due to the annual growth rate of the April CPI dropping to 2.3% and the easing of trade tensions between the U.S. and China. The S&P 500 and Nasdaq indices increased by 0.9% and 1.49%, respectively. The U.S. and China announced a suspension of some tariffs and significantly reduced tariff rates, which boosted market confidence. Technology stocks led the gains, with the Nasdaq entering a technical bull market. The yield on the U.S. 10-year Treasury bond declined, and the dollar index fell, indicating increased expectations of a shift in Federal Reserve policy.

Key Updates

05/15 02:25

US stocks experience slight fluctuations: AI deal boosts tech stocks, the S&P 500 rises for six consecutive days, Treasury yields break through 4.5%

On May 14, 2025, the major U.S. stock indices were mixed. The S&P 500 index rose for the sixth consecutive day, boosted by the AI cooperation agreement between the U.S. and Saudi Arabia, as technology stocks performed strongly. The Nasdaq index also rose, while the Dow Jones index slightly declined. The yield on the 10-year U.S. Treasury note rose to 4.53%, indicating increased pressure in the bond market. Investors are focusing on the forthcoming economic data and remarks from Federal Reserve Chairman Powell to evaluate future policy directions.

05/14 18:56

U.S. stocks opened higher due to trade optimism: the pause in U.S.-China tariffs and easing inflation are boosting the three major indexes.

On May 14, 2025, the U.S. stock market continued its upward trend from earlier this week due to positive news such as the U.S.-China tariff suspension, cooling inflation data, and Trump's visit to the Middle East. The Dow Jones Industrial Average rose by 9.7 points, the S&P 500 rose by 10.2 points, and the Nasdaq rose by 64.6 points. Technology stocks performed strongly, particularly AI-related companies, leading to a positive shift in market sentiment.

05/14 18:27

European stock markets decline: Optimism regarding US-China trade relations diminishes, policy easing does not boost investor confidence

On May 14, 2025, major European stock markets ended lower as optimism among investors about easing US-China trade tensions waned. The London FTSE 100 index dropped 0.21%, the Frankfurt DAX index dropped 0.47%, and the Paris CAC 40 index fell 0.47% as well. Even though the Chinese Ministry of Commerce announced a temporary lift on export controls for 45 US entities, market reactions showed that this short-term policy relief did not boost investor confidence.

05/14 07:27

U.S. stock futures slightly rise: Dow Jones Industrial Average surpasses 42,200 points, indicating stable sentiment in Asian markets

On May 14, 2025, at 12:33 PM Taipei time, futures for the three major U.S. stock indices slightly increased. Dow Jones Industrial Average futures rose 21 points to 42,249, S&P 500 futures increased by 2.75 points to 5,907.25, and Nasdaq 100 futures went up by 20.5 points to 21,298.5. This indicates stable market sentiment during the Asian trading session, as investors focus on global economic and corporate earnings developments.

05/13 18:31

U.S. inflation data falls to a four-year low, European stocks react differently: London edges down, Frankfurt and Paris edge up.

On May 13, 2025, European stock markets had mixed performances after the U.S. April CPI annual growth rate fell to 2.3%. The London FTSE 100 index dipped slightly by 0.02% due to a slowdown in the UK labor market affecting market confidence. Meanwhile, the Frankfurt DAX and Paris CAC 40 indices rose by 0.31% and 0.30%, respectively, boosted by a temporary reduction in tariffs between the U.S. and China and expectations for a rate cut by the European Central Bank. Markets remain cautious about the global economic outlook, reflecting a cautious, wait-and-see attitude amid the interplay of multiple factors.

05/13 17:25

Soft U.S. inflation data and easing U.S.-China trade tensions boost the S&P 500 and Nasdaq.

On May 13, 2025, the U.S. stock market rose due to the annual growth rate of the April CPI dropping to 2.3% and the easing of trade tensions between the U.S. and China. The S&P 500 and Nasdaq indices increased by 0.9% and 1.49%, respectively. The U.S. and China announced a suspension of some tariffs and significantly reduced tariff rates, which boosted market confidence. Technology stocks led the gains, with the Nasdaq entering a technical bull market. The yield on the U.S. 10-year Treasury bond declined, and the dollar index fell, indicating increased expectations of a shift in Federal Reserve policy.

05/13 10:59

Futures for the three major U.S. stock indices simultaneously declined: Dow futures fell more than 90 points as investors pay attention to inflation data.

On the afternoon of May 13, 2025, futures for the three major U.S. stock indices declined. Dow Jones Industrial Average futures dropped 93 points to 42,400, S&P 500 futures fell 19.25 points to 5,845.75, and Nasdaq 100 futures decreased 85.75 points to 20,863. The market was cautious ahead of the U.S. stock market opening, as investors focused on upcoming U.S. inflation data and economic indicators, which could impact the Federal Reserve's interest rate policy.

05/13 06:59

U.S. stock index futures decline: Market sentiment is cautious after the trade agreement, and the three major indices pull back from their highs.

After the US and China announced a 90-day tariff suspension agreement, US stocks surged early in the week. However, as of 1:30 PM Taipei time, May 13, 2025, US stock index futures retreated. Dow Jones Industrial Average futures fell 104 points to 42,389, S&P 500 futures dropped 20.5 points to 5,844.5, and Nasdaq 100 futures decreased 88.75 points to 20,860. Market sentiment turned cautious as investors reassess the real impact and risks of the trade agreement.

05/13 02:58

Shift in Trump's Tariff Policy: Taiwan Stock Market Rebounds Strongly, New Taiwan Dollar Sees Significant Volatility

Since April 2025, the Taiwan stock market has strongly rebounded, and the exchange rate of the New Taiwan Dollar against the US Dollar has fluctuated dramatically due to President Trump's adjustment of reciprocal tariff policy. On May 12, the US and China announced a significant tariff reduction to be implemented within 90 days, with US tariffs on Chinese goods reduced to 30% and Chinese tariffs on US goods reduced to 10%. This move alleviated global trade tensions and boosted the performance of the Taiwan stock market and the New Taiwan Dollar. Financial author Chen Chongming stated that although exchange rate fluctuations affect short-term returns, he remains confident in the long-term prospects of the semiconductor industry.

05/13 02:26

The US and China reached a 90-day mutual tariff reduction agreement, which boosted global markets: US stocks surged by 1,000 points, and Taiwanese ADRs rose across the board.

On May 12, 2025, the United States and China announced an agreement to mutually reduce tariffs for 90 days, with the United States reducing tariffs from 145% to 30% and China reducing tariffs from 125% to 10%. This move boosted global markets, with all four major U.S. stock indices seeing gains. The Dow Jones Industrial Average jumped 1,160.72 points, and the Philadelphia Semiconductor Index rose by 7.04%. ADRs of Taiwanese companies like TSMC, Micron, and UMC also saw increases, with TSMC ADRs up 5.93%. The market's positive reaction reflects investors' optimism about easing trade tensions.

Inflation Data Shows Easing Pressure

Data released by the U.S. Department of Labor indicates that the annual growth rate of the CPI in April was 2.3%, lower than the market expectation of 2.4% and also below March's 2.4%, marking the lowest level since February 2021. The monthly growth rate was 0.2%, also below the expected 0.3%. The core CPI (excluding food and energy) maintained an annual growth rate of 2.8%, meeting expectations, with a monthly growth rate of 0.2%, slightly below the expected 0.3%.

Energy prices decreased by 3.7% year-on-year, and the growth in food and transportation prices also slowed, while housing costs remained stable. These figures suggest that despite recent changes in U.S. tariff policies, inflationary pressures have not fully manifested, providing the market with some breathing room.

Easing U.S.-China Trade Tensions Boost Market Confidence

Before the inflation data was released, the U.S. and China announced a temporary trade agreement on May 12, significantly reducing bilateral tariffs. The U.S. lowered tariffs on Chinese goods from 145% to 30%, while China reduced tariffs on U.S. goods from 125% to 10% and suspended all new tariffs and countermeasures for 90 days. This move is seen by the market as a "ceasefire" in the trade war, significantly reducing the risk of a global economic recession.

The market reacted enthusiastically. Goldman Sachs noted that the easing of trade tensions has spurred a return to "Buy American" trades and raised the year-end target price for the S&P 500 index. JPMorgan also stated that the risk of an economic recession has significantly decreased.

Stock Market Reaction: Tech Stocks Lead Gains, Nasdaq Enters Bull Market

Driven by the positive news, major U.S. stock indices rose for the second consecutive day. On May 13, the S&P 500 index rose 0.9% to 5,889.44 points, returning to the level at the beginning of the year; the Nasdaq Composite Index increased by 1.49% to reach 18,987.31 points, rebounding more than 20% from its April low, officially entering a bull market.

Tech stocks performed particularly well. Nvidia rose 5.6%, Tesla nearly 7%, and Amazon and Apple also showed strong performances. The Nasdaq 100 Index (NDX) rose 4.02%, reflecting strong buying interest in growth tech stocks.

Bond and Forex Markets React in Tandem

Weak inflation data also affected the bond and forex markets. The yield on the U.S. 10-year Treasury fell to 4.45%, reflecting increased market expectations that the Federal Reserve may shift to a more accommodative policy. The interest rate swap market suggests traders anticipate two 25-basis-point rate cuts by the end of 2025.

The U.S. dollar index fell from the previous day's high to 101.265, indicating increased market risk appetite and a flow of funds out of safe-haven currencies. Safe-haven currencies like the Swiss franc strengthened relatively.

Small Business Confidence and Job Market Show Weakness

Despite strong stock market performance, some indicators of the real economy still show weakness. Data from the National Federation of Independent Business (NFIB) shows that the small business confidence index fell for the fourth consecutive month in April, reporting 95.8, below the long-term average. The proportion of businesses reporting job vacancies fell to 34%, the lowest since 2021, indicating that the job market may be cooling.

Corporate Earnings and Market Momentum

Corporate earnings further supported the market. According to Bloomberg Industry Research, 77% of S&P 500 companies reported better-than-expected first-quarter earnings, the best performance in nearly a year. Citigroup's earnings revision index turned positive, indicating that analysts are beginning to raise corporate earnings forecasts.

Additionally, Chinese and tech stocks like Pinduoduo (PDD) and Nvidia benefited from the easing trade tensions, with stock prices rising. The U.S. White House also announced a reduction in tariffs on small parcel tariffs from China, further alleviating trade pressure.

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