Tech Surge and Trade Truce Drive Market Reversal in May

Wall Street Rebounds on Tech Momentum and Tariff Relief

U.S. equity markets saw a notable recovery in mid-May 2025, led by a rally in high-growth technology stocks and a temporary thaw in trade tensions with China. The S&P 500 successfully erased its year-to-date losses as investors cheered robust performances from semiconductor leaders like Nvidia and AMD, as well as renewed enthusiasm around Tesla’s latest earnings beat.

The Dow Jones Industrial Average, however, lagged slightly behind, weighed down by sector-specific challenges. Shares of UnitedHealth fell sharply, contributing to a two-day dip in the blue-chip index. Nonetheless, the broader investor mood improved following President Trump’s announcement of a 90-day pause on new tariffs targeting Chinese imports—an unexpected diplomatic pivot that eased geopolitical uncertainty.

JPMorgan responded to the development by cutting its U.S. recession probability for 2025 from 60% to below 50%, citing the truce as a “constructive surprise” that could buoy consumer sentiment and cross-border trade flows. This shift helped strengthen demand for equities across both developed and emerging markets.

Read more on JPMorgan’s revised outlook here:
👉 Business Insider – Tariff Pause Lowers Recession Odds

Asia and Europe Track Gains as Risk Appetite Returns

International markets echoed the positive tone, with India’s Sensex and Nifty indices closing higher following investor hopes for potential interest rate cuts. The Reserve Bank of India hinted at policy flexibility, encouraging capital inflows and buoying local equities.

In Europe, Goldman Sachs raised its growth projections for both the UK and eurozone, attributing the upgrade to softening financial conditions and the ripple effect of the U.S.-China tariff truce. Additionally, corporate activity in the UK added to investor optimism—U.S.-based FirstCash announced the £297 million acquisition of H&T, the UK’s largest pawnbroker, underscoring confidence in British consumer lending markets.

Meanwhile, DHL’s strategic move to acquire a minority stake in UK-based parcel carrier Evri signals growing interest in last-mile logistics. The deal is expected to boost DHL’s reach in the UK as e-commerce demand persists.

Crypto and Legal Tech Shake Up Broader Landscape

Outside traditional equities, cryptocurrency and tech policy news continue to shape investment decisions. UBS reports that wealthy investors in Asia are increasingly shifting capital from U.S. dollar holdings into gold and crypto, seeking alternatives amid dollar volatility and rising geopolitical risk.

In the regulatory arena, startup accelerator Y Combinator has taken a rare public stance by supporting the antitrust case against Google. It filed a legal brief warning that Google’s dominance is stifling innovation in the startup ecosystem—a move that could escalate scrutiny on Big Tech through 2025.

For more on the tech antitrust challenge, see:
👉 Economic Times – Y Combinator Targets Google’s Monopoly

As earnings season unfolds and geopolitical winds shift, investor focus remains on policy clarity, tech sector leadership, and shifting capital flows—all of which are likely to define market direction in the weeks ahead.