Market Analysis by Antonio Di Giacomo, Financial Markets Analyst for LATAM at XS 1vu40
May 28, 2025 :
“The S&P 500 index saw a sharp rise, reaching the 5,920-point level, driven by a significant boost in U.S. consumer confidence, which hit its highest level in four years. This rally marked the end of a five-month bearish streak. The recovery was fueled by encouraging developments on both economic and political fronts, including a new trade agreement with China and President Donald Trump’s decision to postpone until July 2025 the imposition of 50% tariffs on products from the European Union.
One of the main drivers behind this advance was the technology sector. Companies like Nvidia led the gains, climbing more than 3%, fueled by positive expectations regarding its quarterly results. The intense interest in artificial intelligence solutions continues to drive demand for high-performance chips, positioning Nvidia as one of the primary beneficiaries of this megatrend.
Tesla also stood out in the trading session, with a gain of over 6%. Elon Musk’s statements reaffirming his commitment to the company and his focus on developing new technologies, including advancements in autonomous driving and next-generation batteries, have renewed investor confidence in the company’s strategic direction.
Salesforce posted a gain of more than 2% following reports that it is in advanced talks to acquire Informatica, a company specializing in data management. This deal, estimated at around $8 billion, strengthens Salesforce’s push to expand its capabilities in enterprise artificial intelligence and cloud-based data management.
In the airline sector, Southwest Airlines surprised the market with a 2.6% increase after announcing it would begin charging for checked baggage. This move marks a significant shift in its free baggage policy, which had long been one of its key competitive advantages. It signals new profitability strategies amid a recovery in air travel.
However, not all news was positive. The U.S. Department of Commerce reported a 6.3% drop in durable goods orders in April, mainly due to a 17.1% decline in the transportation sector. This contraction raises concerns about the strength of economic growth and represents a cautionary signal for investors.
Amid this mixed landscape, Federal Reserve such as Neel Kashkari expressed their intention to maintain a cautious stance. They emphasized that no changes to interest rates should be made until there is greater clarity on how trade tensions and recent political decisions might affect the U.S. economy.
In conclusion, the U.S. stock market has shown signs of recovery, driven by factors such as improved consumer confidence, optimism in the tech sector, and political decisions that ease trade tensions. However, the decline in durable goods orders and the Federal Reserve’s cautious tone highlight the persistence of structural challenges. Balancing enthusiasm for growth with caution over potential slowdowns will be key in determining the market’s direction in the coming weeks.”