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The week opened with a bang as the U.S. and China announced a 90-day truce in the trade war. The rebound in risk appetite propelled the Nasdaq-100 into a bull market just a little over a month after it fell into the grip of a bear. The large-cap tech benchmark and the S&P 500 then proceeded to gain every day of the week, while the Dow saw losses midweek, driven down by a sharp drop in UnitedHealth.
The weaker-than-expected readings on CPI and wholesale inflation deflected doubts about Corporate America's ability to withstand trade turbulence without having to pass on higher costs to consumers. Arriving right after a strong earnings season, this data confirmed U.S. companies' resilience, supporting forward valuations based on high profit expectations and adding optimism about the overall economic outlook. On this background, a fifth-straight monthly dip in the consumer sentiment index and weaker-than-expected retail sales went almost unnoticed.
In fact, Trump's Middle East news flurry could easily overshadow any negative news. The President announced a $142 billion arms deal with Saudi Arabia, as well as broader investments totaling $600 billion - and then went on to strike major aviation and defense agreements with Qatar, followed by a deal-heavy visit to the United Arab Emirates (UAE). Qatar signed more than $243 billion in defense and commercial deals with the U.S., laying the groundwork for a bigger $1.2 trillion economic pledge.
However, the strongest catalyst for the U.S. stock rally was the technology component of these Middle East agreements. Thus, Nvidia and AMD will supply advanced chips to Saudi Arabian state-backed firm Humain for a massive data-center project, while other U.S. hardware and infrastructure firms also stand to benefit from the Kingdom's bid to become a global tech hub. In a separate development, President Trump finalized a significant AI chip agreement with the UAE, permitting the Gulf country to import advanced Nvidia chips for the construction of the largest AI data center outside of the U.S. in Abu Dhabi. Risk-on sentiment was so strong that the news of Moody's downgrade of the U.S. credit rating on Friday - even coupled with the failure to advance House Republicans' massive tax-and-spending bill - provided just a minor hiccup in the stock-market advance. The rally was further supported by news that the U.S. and the EU broke a prolonged deadlock and agreed to resume formal trade negotiations, which gave the market another signal that the "tariff tantrum" in stocks may be over.
Here are three key economic events that could affect your portfolio this week. For a full listing of additional economic reports, check out the TipRanks Economic Calendar.
" May's S&P Global Manufacturing PMI (preliminary reading) - Thursday, 05/22 - This report measures business activity in the manufacturing sector, a critical component of U.S. GDP. As a leading economic indicator, this index provides timely insight into current and future economic conditions.
" May's S&P Global Services PMI (preliminary reading) - Thursday, 05/22 - This report gauges activity in the services sector, which makes up more than 70% of the U.S. economy. This index is closely watched as a bellwether of broader economic momentum. Because it reflects both consumer and business sentiment, movements in the Services PMI often precede shifts in overall economic performance.
" April's Existing Home Sales Change - Thursday, 05/22 - This report tracks monthly changes in sales of existing single-family homes, condominiums, and co-ops. As existing home sales represent over 90% of all U.S. home sales, this metric is a key indicator of housing market health. Trends in this data often correlate with shifts in consumer confidence, mortgage activity, and overall economic stability.