Wall Street cautious as stock market rally may be overextended despite trade breakthroughs

From Yahoo Finance: 2025-05-18 08:30:00

The stock market rally, fueled by President Trump’s tariff rollback on China, has some strategists cautioning that the rebound may be overextended. The S&P 500 has surged roughly 1,000 points from its April 9 lows, prompting some Wall Street firms to raise their year-end outlooks. Despite recent negotiations, tariff levels remain high, with UBS strategists estimating the effective US tariff rate at roughly 15%, significantly higher than earlier this year. While trade optimism has boosted the market, experts warn that without concrete resolutions, volatility could return. Walmart warns it may raise prices due to cost increases on imported goods. Defensive sectors like utilities and international equities are being recommended by strategists as a response to market volatility. 1. The stock market reached record highs today as the S&P 500 and Dow Jones both saw significant gains. The S&P 500 closed at 4,000 points for the first time in history, while the Dow Jones surpassed 33,000 points.

2. A new study by the CDC found that the Pfizer and Moderna COVID-19 vaccines are highly effective in preventing infection after just one dose. The study analyzed data from over 4,000 healthcare workers and found that the vaccines were 80% effective in preventing infection two weeks after the first dose.

3. President Biden signed a $1.9 trillion COVID-19 relief bill into law, providing much-needed aid to struggling Americans. The bill includes $1,400 stimulus checks for individuals making less than $75,000 a year, as well as funding for vaccine distribution, unemployment benefits, and small businesses.



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