The Markets

Last week, the U.S. stock market showed why it’s a good idea to stay invested through bouts of volatility.

Major U.S. stock indices notched sizeable gains as investors celebrated a trade truce with China and better-than-expected inflation numbers, while brushing off a tepid consumer sentiment reading. Here’s what happened:

The administration negotiated a trade truce with China. The United States and China agreed to reduce tariffs for 90 days. U.S. tariffs on Chinese imports will fall to 30%, while China’s tariffs on U.S. imports will drop to 10%. The Wall Street Journal reported, “The agreement lowered tariff levels far more than Wall Street had expected, with one analyst… calling the deal a ‘best-case scenario’ for investors. Goldman Sachs cut its U.S. recession odds to 35% from 45% and boosted its growth forecast.”

Inflation is closing in on the Federal Reserve’s target. Prices increased by 2.3% year over year in April. That put headline inflation just a smidge above the Fed’s two percent target. When the volatile categories of food and energy were excluded, prices were up 2.8% year over year. The price of eggs fell by 13% month to month leading a decline in the cost of food. Five of six major grocery store food group indexes moved lower in April.

Consumers were concerned about inflation. While the Consumer Price Index’s April inflation numbers were encouraging, the inflation numbers in the University of Michigan’s Consumer Sentiment Survey were less so. “Year-ahead inflation expectations surged from 6.5% last month to 7.3% this month… Long-run inflation expectations lifted from 4.4% in April to 4.6% in May…,” reported Surveys of Consumers Director Joanne Hsu.

The U.S. bond market was in a less cheerful mood than the U.S. stock market last week. On Friday, Moody’s lowered the rating for U.S. government bonds on concerns about the deficit (the difference between how much the government spends each year and how much it takes in through taxes) and rising interest costs. The rating service explained:

“Successive U.S. administrations and Congress have failed to agree on measures to reverse the trend of large annual fiscal deficits and growing interest costs. We do not believe that material multi-year reductions in mandatory spending and deficits will result from current fiscal proposals under consideration.”

Over the week, U.S. stock markets saw solid gains with the Standard & Poor’s 500 Index moving into positive territory for the year to date. U.S. Treasury yields ended the week near where they started.


Data as of 5/16/25 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor's 500 Index 5.3% 1.3% 12.5% 14.1% 15.1% 10.8%
Dow Jones Global ex-U.S. Index 1.6 10.5 7.3 7.8 8.2 2.6
10-year Treasury Note (yield only) 4.4 N/A 4.4 2.9 0.7 2.2
Gold (per ounce) -4.3 21.9 33.9 20.7 12.9 10.0
Bloomberg Commodity Index -1.8 2.2 -3.0 -8.3 9.9 -.4

S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.

Sources: Yahoo! Finance, MarketWatch, djindexes.com, London Bullion Market Association.

Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

What Do You Know About Memorial Day?

Memorial Day offers a blend of celebration and remembrance. It’s the time when we honor the men and women who bravely sacrificed their lives in service to the United States of America. The holiday reminds us that freedom is not free and gives us an opportunity to remember those who fought and died defending our country. See what you know about Memorial Day by taking this brief quiz.

  1. How do we remember the fallen on Memorial Day?
    1. Flying the flag at half mast
    2. Participating in The National Moment of Remembrance
    3. Placing flags and flowers in cemeteries
    4. All of the above
  2. What type of flower is traditionally worn on Memorial Day?
    1. A sunflower
    2. A poppy
    3. A chrysanthemum
    4. A rose
  3. The Medal of Honor is the United States' highest award for military valor in action. More than 3,500 soldiers, sailors, airmen, guardians, marines, and coast guards have received the honor. How many double Medal of Honor recipients have there been?
    1. 7
    2. 12
    3. 19
    4. 22
  4. Visitors to military cemeteries on Memorial Day may see coins on headstones. The type of coin left behind has significance. When a person leaves a nickel on the headstone of a service member, it means they:
    1. Appreciate the veteran’s service
    2. Trained together at boot camp
    3. Served together
    4. Were there when the veteran died

How do you celebrate Memorial Day?

Answers: 1) d; 2) b; 3) c; 4) b

Weekly Focus – Think About It

"Heroism doesn’t always happen in a burst of glory. Sometimes small triumphs and large hearts change the course of history. Sometimes a chicken can save a man’s life."

—Mary Roach, Author

Wishing you and your families well,
Sean M. Dowling, CFP, EA
President, The Dowling Group Wealth Management

Please feel free to forward this commentary to family, friends, or colleagues. If you would like us to add them to the list, please reply to this e-mail with their e-mail address and we will ask for their permission to be added.

  • Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.
  • Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
  • The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
  • All indexes referenced are unmanaged. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.
  • The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
  • The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
  • Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.
  • The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
  • The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
  • International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
  • Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
  • Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
  • Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
  • Past performance does not guarantee future results. Investing involves risk, including loss of principal.
  • You cannot invest directly in an index.
  • Stock investing involves risk including loss of principal.
  • The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth may not develop as predicted and are subject to change. Investing involves risk including loss of principal.
  • The Price-to-Earning (P/E) ratio is a measure of the price paid for a share relative to the annual net income or profit earned by the firm per share. It is a financial ratio used for valuation: a higher P/E ratio means investors are paying more for each unit of net income, thus, the stock is more expensive compared to one with a lower P/E ratio.
  • These views are those of Carson Group Coaching, and not the presenting Representative or the Representative’s Broker/Dealer, and should not be construed as investment advice.
  • This newsletter was prepared by Carson Group Coaching. Carson Group Coaching is not affiliated with the named broker/dealer.
  • The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
  • Consult your financial professional before making any investment decision.

Sources:

https://www.barrons.com/market-data?mod=BOL_TOPNAV or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/05-19-25-Barrons-DJIA-S&P-Nasdaq%20-%201.pdf

https://www.wsj.com/livecoverage/stock-market-today-tariffs-trade-war-05-12-2025 or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/05-19-25-WSJ-US-China-Agree-to-Large-Tariff-Cuts%20-%202.pdf

https://www.bls.gov/news.release/pdf/cpi.pdf [report and Table 2]

https://www.cnbc.com/2025/05/14/cnbc-daily-open-tame-cpi-in-april-banishes-stagflation-threat-for-now.html

https://www.sca.isr.umich.edu

https://ratings.moodys.com/ratings-news/443154

https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value=2025

https://www.memorialdayfoundation.org/education/how-to-observe-memorial-day/

https://www.rd.com/article/memorial-day-poppies/

https://www.cmohs.org/recipients/lists/double-recipients

https://dma.mt.gov/MVAD/MVAD-Images/Coins-on-headstones-meaning.pdf

https://www.goodreads.com/quotes/7682393-heroism-doesn-t-always-happen-in-a-burst-of-glory-sometimes

ADV & Investment Objectives: Please contact The Dowling Group if there are any changes in your financial situation or investment objectives, or if you wish to impose, add or modify any reasonable restrictions to the management of your account. Our current disclosure statement is set forth on Part II of Form ADV and is available for your review upon request.