Closing Recap 

U.S. stocks capped a stellar week with the S&P 500 notching its fifth consecutive day of gains, as positive developments in trade talks, including deals with China and Middle Eastern nations, fueled a broad market rally, pushing major indices closer to all-time highs. 

Looking Ahead

Looking ahead, the market will digest a host of important global economic data and central bank actions. Monday features an EU-UK Summit aimed at resetting post-Brexit relations, with defence/security as key priorities. Also on Monday, Chinese activity data for April (Industrial Production, Retail Sales) will provide the first comprehensive look at the economic impact of the April tariff escalations, though the recent truce may temper the data’s immediate market significance. On Tuesday, the People’s Bank of China (PBoC) is expected to lower its Loan Prime Rates (LPRs) following recent policy easing announcements. 

The Reserve Bank of Australia (RBA) also meets on Tuesday, with markets pricing a very high probability of a 25bps rate cut. Inflation data will be a key theme, with Canadian CPI (Tuesday), UK CPI (Wednesday), and Japanese CPI (Friday) all due. A barrage of Flash PMIs for May from major economies (Thursday) will offer timely insights into global manufacturing and services activity. The ECB will release the minutes from its April policy meeting (Thursday), where it cut rates.

Key Takeaways 

• Strong Bullish Momentum: The S&P 500 rallied for 5 straight days, gaining 2.4% for the week, now up over 20% from April lows and less than 4% from all-time highs. Nasdaq, Dow, and Russell 2000 also saw significant weekly gains. 
• Trade Deals Drive Sentiment: Upbeat trade/tariff news, including announced deals with China and Middle Eastern nations, significantly boosted investor confidence. 
• Options Expiration Impact: Friday’s gains were amplified by a massive $2.8 trillion options expiration, contributing to the upward “melt-up” throughout the day. 
• Dollar Rises Weekly, Oil Gains: The US Dollar posted its fourth straight weekly rise against the yen and euro, though remains well below pre-April tariff levels. Oil prices (WTI & Brent) saw a second consecutive weekly gain on easing trade tensions. 
• Gold Slumps: Gold prices fell on the day and suffered their worst week in six months (down over -3%) as improved risk appetite and a stronger dollar dented safe-haven demand. 

Market Overview 

It was a truly remarkable week for U.S. equities, with the S&P 500 extending its winning streak to five consecutive days and, along with other major indices, continuing its impressive recovery from the April “Liberation Day” tariff-induced sell-off. Investor sentiment has been decidedly bullish, fueled by a string of positive developments in trade negotiations. Deals announced this week with China and several Middle Eastern nations have significantly eased concerns about escalating trade wars, propelling a broad-based rally. The S&P 500 is now up more than 20% from its April lows and is tantalizingly close to the 6,000 level, less than 4% away from its all-time highs. Friday’s session saw markets steadily “melt higher,” partly influenced by a massive options expiration event involving over $2.8 trillion in notional value.

Index	Last Closing Level	Friday’s Change	Friday’s Change (%)
DJ Industrials	42654	331.99	0.0078
S&P 500	5958	41.45	0.007
Nasdaq	19211	98.78	0.0052
Russell 2000	2113	18.56	0.0089

While stocks surged, other asset classes responded to the shifting risk landscape. The U.S. dollar posted its fourth consecutive weekly gain against the yen and euro, benefiting from the improved trade outlook, though it remains significantly below levels seen before the April tariff announcements. Oil prices continued their recovery, marking a second straight week of gains as easing U.S.-China trade tensions outweighed concerns about potential supply increases from Iran and OPEC+. Conversely, gold prices took a significant hit, experiencing their worst weekly decline in six months as the improved risk appetite and a stronger dollar diminished its appeal as a safe-haven asset. U.S. Treasury yields saw some volatility, with the 10-year yield dropping from Thursday’s highs before finishing the week around 4.44%.

Economic Data Calendar (Week of May 19th) 

MON (May 20): 

• EU-UK Summit (London): Brexit reset talks; focus on defence/security, fishing, youth mobility. 
• Chinese Industrial Output, Retail Sales, House Prices (Apr): First full data set post-April tariff escalation. IP & Retail Sales exp. to moderate to 5.5% Y/Y.
• EZ HICP Final (Apr): Final Eurozone inflation reading for April. Holiday Note: Canada closed for Victoria Day. 

TUE (May 21): 

• PBoC Loan Prime Rate (LPR) Setting: 1Y & 5Y LPRs expected to be cut by 10bps following recent broad policy easing. 
• RBA Policy Announcement: 25bps rate cut to 3.85% highly expected (98% priced in) to support the economy. 
• EZ Current Account (Mar), Consumer Confidence Flash (May): Eurozone indicators. 
• Canadian CPI (Apr): March CPI eased to 2.3% Y/Y; BoC minutes noted difficulty predicting inflation beyond April. 

WED (May 22): 

• Japanese Trade Balance (Apr): Trade figures for Japan. 
• UK CPI (Apr): Headline CPI expected to jump to 3.6% Y/Y (from 2.6%) due to utility/tax hikes and tariff effects, potentially exceeding BoE forecasts. 

THU (May 23): 

• ECB Monetary Policy Meeting Accounts (Apr Meeting): Details from the meeting where the ECB cut rates by 25bps. Focus on discussion around 50bps cut, June cut signals, and removal of “restrictive” language. 
• Flash PMIs (May – AU, JP, EZ, UK, US): Key global activity indicators. EZ Mfg exp. 49.5, Services 50.3. UK Mfg exp. 45.9, Services 49.5. 
• UK Public Sector Net Borrowing (Apr): UK fiscal data. 
• US Initial Jobless Claims (w/e May 17): Labor market indicator. 

FRI (May 24): 

• Japanese National CPI (Apr): Core CPI Y/Y exp. to tick up to 3.4% (from 3.2%) driven by energy subsidy cuts and price hikes. 
• German Detailed GDP (Q1): Breakdown of Germany’s Q1 growth. 
• UK Retail Sales (Apr): Expected to show continued but more moderate growth (+0.3% M/M) post-strong Q1. 
• US New Home Sales (Apr): Housing market data. 
• Canadian Retail Sales (Mar): Consumer spending data. 

Commodities, Currencies, and Treasuries 

Oil prices edged higher on Friday and posted their second consecutive weekly gain, with WTI crude settling near $62.50/bbl. Easing U.S.-China trade tensions provided support, though expectations of higher supply from Iran (due to potential nuclear deal progress) and OPEC+ capped advances. Gold prices fell on Friday and suffered their worst weekly decline in six months (down over -3%), settling around $3,187/oz. A stronger U.S. dollar and the temporary U.S.-China trade agreement reduced demand for the safe-haven metal. The U.S. dollar registered its fourth straight weekly rise against the yen and the euro, though it remains significantly below its levels prior to the April tariff announcements. The benchmark 10-year U.S. Treasury yield ended the week around 4.44%, after some intra-week fluctuations.

Asset	Last Level	Friday’s Change	Unit / % Change
WTI Crude	62.49	0.87	USD/bbl
Brent Crude	65.41	0.88	USD/bbl
Gold (June Fut.)	3187.2	-39.4	USD/oz
EUR/USD	1.1141	-0.0045	Rate
USD/JPY	145.97	0.29	Rate
10-Year Note Yield	0.04435	-0.0002	Yield (%)