Stock Market Update Thursday May 29, 2025

Stock Market Update Thursday May 29, 2025 Equities endured a whipsaw session after a judicial ruling imposed constraints on legacy Trump-era tariffs. The S&P 500 opened with a 1.5% gap higher in pre-market trade, reversed intraday to flat, and ultimately closed with a modest 0.4% gain.

Away From Stocks: Treasury markets rallied across the curve, supported by a bid for duration. The 2-year yield retreated 4 basis points to 3.92%, while the 30-year yield dipped 5 basis points to 4.92%, reflecting demand amid macro uncertainty. In commodities, WTI crude slipped below the key $61/barrel level, signaling continued pressure on energy markets. Meanwhile, gold extended its uptrend, settling at $3,318/oz, reflecting safe-haven flows. Digital assets remained under pressure, with Bitcoin cooling to $106,000, consolidating recent gains. The VIX held steady at 19, suggesting guarded investor sentiment despite underlying volatility.

Tariff Policy Whiplash: A Two-Month Timeline of Trade Turbulence

Over the past two months, global trade policy has been in flux, driven by a cascade of judicial reversals, executive maneuvers, and fragmented international agreements. Here's a chronological breakdown of the evolving tariff regime:

• Liberation Day: Trade policy kicked off with the imposition of broad “reciprocal tariffs,” pushing the weighted average import tax close to 30%, signaling an aggressive protectionist stance.

• This was followed by a 90-day global tariff pause (excluding China), which reduced the weighted average tariff to 20%, offering temporary relief to most trading partners.

• A subsequent China-specific tariff pause at 30% further eased tensions, bringing the global weighted average down to 15%.

• Yesterday, the U.S. Court of International Trade struck down core tariff provisions, citing procedural overreach and inconsistent enforcement.

• In response, Peter Navarro resurfaced in media briefings, hinting at potential action under Section 122 of the Trade Act of 1974 (allowing currency-related tariffs) and Section 301 (targeting unfair foreign practices), rekindling uncertainty.

• Today, a U.S. Appeals Court overturned the lower court ruling, effectively restoring the 15% average tariff regime, pending further legal review.

• The matter now escalates to the U.S. Supreme Court, setting the stage for a decisive constitutional interpretation of executive tariff authority.

• Looking ahead, tariff pauses covering 179 countries are set to expire on July 9, triggering a return to a 10% baseline rate, unless new exemptions are negotiated. China’s pause is scheduled to lapse on August 12, with no bilateral resolution in place.

• As of now, the U.S. has only one unsigned bilateral agreement—with the United Kingdom, leaving most trade relationships unsettled.

This fluid and unpredictable trade policy environment has created significant challenges for global supply chains, multinational corporations, and emerging markets. The legal trajectory now hinges on the Supreme Court's pending review, while markets await clarity on whether these escalating tariff regimes will be codified or reversed yet again.

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