Five for Five
May 5, 2025
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The S&P 500 Index rose on all five trading days last week, marking its first nine-day winning streak since November 2004.1 As of last Friday's close, the index stands slightly above its level on the day of the reciprocal tariffs’ announcement,2 demonstrating that the equity market has responded positively to the recent de-escalation in trade tensions.
It was also a busy week on the data front. The advance estimate for first-quarter gross domestic product (GDP) came in at -0.3%, a broadly anticipated decline due to the distortion from import surges ahead of tariff implementation.3 However, real final sales, a better gauge of underlying domestic private demand, increased by 3.0%, up from 2.9% in the fourth quarter of 2024.4 Meanwhile, Friday’s non-farm payroll report confirmed the health of the current labor market, with the unemployment rate holding steady at 4.2%.5
Corporate earnings also took center stage, particularly among four Magnificent Seven stocks. The most encouraging news came from Meta, which raised its 2025 capital expenditure guidance to $64–72 billion, up from a prior estimate of $60–65 billion.6 This move helped ease investor concerns about a potential pullback in artificial intelligence investment following the DeepSeek news. On a less positive note, FactSet reported that analysts made larger-than-average cuts to second-quarter earnings per share estimates for S&P 500 companies.7
Looking ahead, focus turns to Wednesday’s Federal Open Market Committee (FOMC) meeting.8 While no change to interest rates is expected, investors will be closely monitoring any signals regarding how the committee may balance the conflicting impacts of tariffs on its dual mandate. Other notable events include the release of the S&P Global U.S. Services Purchasing Managers’ Index (PMI) and the Institute for Supply Management (ISM) Services Index today,9 as well as the Bank of England's Monetary Policy Committee meeting on Thursday.10
Sources:
1CNN – S&P 500 posts longest winning streak in 20 years as Trump and China show some willingness to bend on trade; 5/2/25
2,8,9Bloomberg
3,4Bureau of Economic Analysis – Gross Domestic Product, 1st Quarter 2025 (Advance Estimate); 4/30/25
5U.S. Bureau of Labor Statistics – Employment Situation News Release; 5/2/25
6Meta – Meta Reports First Quarter 2025 Results; 4/30/25
7FactSet – Earnings Insight; 5/2/25
10Bank of England – Monetary Policy Committee dates for 2025 and 2026
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