JAKARTA — The three major US stock indices—Nasdaq, S&P 500, and the Dow Jones Industrial Average—posted a bullish trend over the past week, buoyed by improving global conditions and stronger-than-expected US economic indicators following shocks from import tariff policies.

As of the close of trading on Friday, 9 May, Nasdaq recorded the highest gain, climbing 7.15% to 19,211.10 as of Friday (16/5). S&P 500 rose 5.27% to 5,958.38, while the Dow Jones advanced 3.41% to 42,564.74.

The surge in investor appetite and market optimism aligned with several positive developments in global affairs and the US economy over the past week.

The United States and China agreed to reduce import tariffs to 30% and 10%, respectively—from previous levels of 145% and 125%—following a meeting in Switzerland on Monday (12/5). The agreement will remain in effect for 90 days as both countries continue broader negotiations.

Despite ongoing caution from some Wall Street investors over the potential economic drag from tariff policies, all three indices rallied out of bearish territory during trading on Tuesday (13/5).

In addition to easing global trade tensions, the US Consumer Price Index (CPI) data for April 2025 showed that inflation slowed to 2.3%, down from 2.4% in March 2025.

The figure came in lower than widely anticipated. However, UBS warned that inflation may accelerate over the next six months if high tariffs are fully implemented.

Lastly, the moderation in inflation has increased the likelihood of interest rate cuts by the Federal Reserve, thereby boosting markets.

Nonetheless, the Fed is expected to hold rates steady at 4.25%-4.50% during the upcoming June FOMC (Federal Open Market Committee) meeting, with rate cuts likely only in the second half of 2025. (ZH)