Weekly Economic Update – 05/12/2025

The Week on Wall Street

Stocks were mixed last week as volatility dropped despite ongoing trade concerns and the Federal Reserve’s update on short-term rates.


The Dow Jones Industrial Average added 0.16 percent, while the Standard & Poor’s 500 Index lost 0.47 percent. The tech-heavy Nasdaq Composite Index slipped 0.27 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, fell 0.37 percent.1,2

Stocks Go Sideways

Stocks dropped on Monday, ending the S&P 500’s 9-day winning streak as the trade anxiety weighed on investors.3,4

Sentiment picked up midweek, however. In a widely expected move, the Fed held short-term interest rates steady but warned of lingering uncertainty around tariffs’ effects on inflation and unemployment.5,6

On Thursday, the U.S.-U.K. trade deal sparked a slight rally, but stocks flattened as the week ended. Investors appeared to be risk-averse with U.S.-China trade talks scheduled for the weekend.7

The Fed Fans Out

The Federal Reserve wanted to get its message out last week. Within 48 hours of the Fed’s decision to leave interest rates unchanged, nearly every Fed governor gave a solo speech or discussed the decision on a panel.
One Fed official spoke about the benefits of long-term stability from an independent Fed. At the same time, another said the Fed was paying close attention to what consumers did—and not just what they said, suggesting that flagging consumer sentiment didn’t necessarily mean a slowdown in spending.7

The Fed seemed to focus on managing expectations. Perhaps more importantly, Fed officials spoke from a coordinated playbook, possibly designed to help settle financial markets.

Weekly Riddle

What always shows up in the middle of March and the middle of April?

Last week’s riddle: A word appears, and six letters it contains. Subtract only one, then twelve remains. What is this word?

Answer: Dozens.

John Dombroski Jr. may be reached at (480) 991-1055 or [email protected]
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