Joe Tigay Stock Market Update: May 2025 – Fed Meeting, Big News & Hot Earnings
The stock market rollercoaster is taking another wild turn as we kick off May 2025. After tech companies fueled last week’s impressive rally, today brings fresh challenges with a dollar dive and volatility making a comeback. We’re tracking everything from Warren Buffett’s farewell tour to Palantir’s hotly anticipated earnings report. Let’s dive into what’s moving markets and where smart money is watching.
Last Week’s Victory Lap: Tech Giants Show Off Their Muscles
Last week gave us something to celebrate! The S&P 500 surged 10% over nine consecutive sessions—its longest winning streak since 2004. Not to be outdone, the Dow flexed its own muscles with its longest win streak of 2025, climbing 0.3% on April 28.
Tech titans led the charge with Microsoft, Amazon, and Meta, all delivering knockout Q1 earnings. Alphabet jumped 4.6% after hours on April 24, reporting a whopping $90.2 billion in revenue, boosted by an $8 billion SpaceX investment win. Talk about picking winners!
The real story? Tech companies proved the economy still has plenty of pep in its step. Cloud revenue is soaring—Google Cloud grew 28% while Azure expects to jump 31%—showing companies haven’t stopped investing in their digital futures. Meanwhile, stock buybacks remain as popular as ever, with Apple announcing a cool $100 billion repurchase program and Alphabet adding $70 billion to its own. Who says money isn’t flowing?
These positive signals effectively thumb their noses at recession fears, suggesting businesses continue pouring money into AI and digital transformation despite those pesky 145% U.S.-China tariffs.
Today’s Reality Check: Dollar Drops as Markets Wobble
Despite last week’s party, we’re nursing a bit of a hangover today (May 5, 2025, 09:02 AM EDT). Dow futures have slipped 0.7% after President Trump pulled the plug on U.S.-China talks, quickly dousing earlier optimism. The dollar is taking a beating, echoing the jitters we saw two weeks ago when tariff fears sent everyone running for cover.
The S&P 500, now down 7% from its all-time high, jumps at every headline like a cat on a hot tin roof. Wolfe Research warns investors to watch out for those “vicious” bear market rallies that can trick even seasoned traders. Volatility remains stubbornly high, especially as investors worry about potential fire sales in American assets if the dollar continues its slide or tariff tensions heat up further.
Jobs Report: America’s Still Hiring!
Friday’s April jobs report gave us something to smile about, with the U.S. economy adding 177,000 jobs—handily beating expectations of 135,000. The unemployment rate held steady at 4.2%, showing our labor market still has plenty of fight despite that Q1 2025 economic hiccup.
There’s a small cloud on the horizon, though—long-term unemployment rose by 179,000, suggesting some hiring roadblocks that could dampen spirits if they persist.
Warren Buffett’s Grand Finale: The Oracle Changes Course
Weekend bombshell alert! Warren Buffett announced he’s hanging up his CEO hat at Berkshire Hathaway by the end of 2025, passing the torch to Greg Abel after a legendary 60-year run.
Speaking to shareholders in Omaha on May 3, the Oracle waved off recent market drama as “really nothing,” reminding everyone that Berkshire stock has weathered 50% drops three times during his watch. However, he didn’t pull punches on tariffs, declaring “Trade should not be a weapon,” and encouraging the U.S. to share prosperity globally.
Most eyebrow-raising? Buffett suggested diversifying away from the U.S. dollar—quite the statement coming from someone sitting on a $300 billion cash mountain. With the dollar already sliding today, Buffett’s words might signal a broader shift in how the smart money thinks.
Earnings Spotlight: Palantir Steps Into the Ring
This week’s earnings calendar is packed tighter than a rush-hour elevator, with Palantir Technologies taking center stage today after the closing bell. Analysts expect Q1 earnings of $0.13 per share (up 62% year-over-year) and revenue of $862 million (jumping 36% year-over-year), with U.S. commercial revenue expected to rocket up 60% and government revenue climbing 45%.
Palantir has defied gravity this year, rising 45% while many tech names stumbled. But its sky-high valuation (69 times 2025 earnings) has Wall Street deeply divided, with price targets ranging from $40 to an optimistic $130. A stellar report could add fuel to the AI rocket ship, while disappointment might amplify market jitters.
Other spotlight earnings include Ford today (all eyes on those EV numbers), AMD tomorrow (chip demand, anyone?), and Disney on May 7 (testing consumer spending amid new tariff whispers on foreign films—a development already weighing on Netflix and Disney shares today).
What Smart Investors Are Watching
Keep your radar tuned to these potential market-movers:
- Tariff Developments: Trump’s “90-day pause” on most tariffs (except China) expires July 9, but deals could materialize anytime—especially after China’s recent olive branch of exemptions on U.S. goods. A breakthrough could spark a rally, while escalation would crank up volatility.
- Federal Budget Progress: A budget agreement might drop any day now, potentially calming markets by reducing fiscal uncertainty—a major concern during trade tensions.
- Fed Signals: The Federal Reserve meets this week, with investors hungry for hints about resumed rate cuts (currently at 4.25%–4.5%). Markets expect three quarter-point cuts in 2025, though that strong jobs report dialed expectations back from four.
- Economic Pulse Checks: Today’s ISM Services PMI and Thursday’s jobless claims will test our economic resilience. Any weakness in the labor market could reignite those pesky recession fears.
- Cloud Spending Trends: Palantir and AMD earnings will reveal whether companies are still splurging on IT and AI investment—key indicators of economic confidence after last week’s tech strength.
Bottom Line
May 2025 finds the market at a fascinating crossroads—juggling last week’s tech-powered optimism against today’s dollar weakness and tariff uncertainties. Palantir’s earnings could set the tone for AI stocks, while Buffett’s upcoming exit and diversification advice remind us to keep our wits about us.
Volatility isn’t going anywhere, but neither are opportunities for savvy investors who can separate signal from noise. Keep your eyes peeled for tariff breakthroughs, budget news, and economic data to guide your next market moves. Happy trading!
