From Triple-A to ‘Aah, Whatever’
Market Report for Monday, May 19, 2025
From Triple-A to ‘Aah, Whatever’
Stocks tripped on the welcome mat Monday morning after a Moody’s downgrade to America’s credit rating, then found enough spine to notch a sixth straight win for the S&P 500. Wall Street’s moral: shrug off the future, believe in the bounce.
Level Change 5/19/25 (%)
– – – – – – – – – – – – – – –
+0.3 Dow
+0.0 Nasdaq
+0.1 Nasdaq 100
+0.1 S&P 500
-0.3 S&P 400
-0.6 S&P 600
The market began the week trying to digest Friday’s post-close downgrade of US credit by Moody’s, which cut the government’s rating from Aaa to Aa1 — still elite, but no longer valedictorian. Treasury Secretary Scott Bessent blamed Biden’s “reckless spending.” National Economic Council Director Kevin Hassett called US debt “the safest bet on earth.” If by “safest” he means “too big to fail and too stubborn to change,” then yes, sleep well.
Numbers speak louder than talking points. Under Biden, the national debt climbed 31%, lower than Trump’s 39% in his first term. Before them, Obama racked up 64%, Bush 73%, and Clinton — the austerity poster child — 29%. It turns out debt denial is bipartisan.
Trade remained a tariff tug-of-war. Bessent warned that holdout countries could face a return to April 2’s “Liberation Day” sky-high rates, while Hassett dangled a more optimistic line: 15 countries are “close” to a deal. It’s diplomacy by boomerang: throw the tariff, wait for it to circle back as a “deal.”
Trump, irked by the predictable fallout of his own policies, took aim at Walmart (WMT -0.1%) for warning about price hikes. He told the king of everyday low prices to “eat the tariffs.” That may thrill voters, but shareholders exhibit a preference for profit margins and an aversion to charity at scale.
Fed officials made the rounds, each delivering a slight variation of “wait and see.” Jefferson and Kashkari stuck to the script. Bostic expressed worry over inflation and favored just one cut this year. Williams said a September start to easing still makes sense — which markets already assumed. Nothing beats having your homework graded by the guy copying it.
JPMorgan (JPM -1.0%) reiterated its $94.5B net interest income guidance but floated the chance of upside if consumers stay resilient. CFO Jeremy Barnum flagged tariffs and geopolitics as wild cards, while Consumer Banking Chief Marianne Lake said consumers remain strong but anxious. Small business confidence has eroded behind a stack of import invoices.
Despite it all, the bounce from April’s tariff lows has now cleared 19%. The S&P is up for the year. But with inflation eyeing Walmart’s checkout line, trade policy improvisational, and sentiment brittle, it’s best not to get too cozy. We’re six wins in, but it’s the kind of momentum built up after a few drinks.
— Jason Kelly