Stock Market Summary – May 19, 2025

Jamie Dimon, CEO of JPMorgan Chase, expressed concern over market complacency, speculative U.S. deficits, tariffs, and international tensions. He projects S&P 500 earnings growth to drop to 0% from an estimated 12% earlier this year. This follows the recent downgrading of the U.S. credit rating by Moody’s due to the ballooning government debt burden.

Despite economic worries and market volatility, stocks showed resilience with Capital One announcing the closing of its $35 billion acquisition of Discover Financial after overcoming a major lawsuit. Shares of Capital One rose 1% to roughly $199 each on this news.

Pertaining to investment banking, JPMorgan anticipates a “mid-teens” percentage decline in the Q2 revenue compared to the year-earlier period, while expecting a “mid-to-high” single-digit percentage increase in trading revenue.

President Donald Trump’s announced tariffs and their potential impact on inflation caused market jitters and a sell-off in high-value companies. However, Nvidia, a leading AI chipmaker, saw its stock rise by 16% last week after launching new AI technology and making deals in the Middle East.

Shares in Apple were down following concerns over the tech giant’s AI efforts and its partnership with Alibaba, signaling possible obstacles amid the US-China trade situation. Other significant share price moves were observed in UnitedHealth, which saw its stock rise by 7%, and Reddit, whose shares dropped by over 4%.

Overall, despite the caution infused in the market due to the credit downgrade and tariff issues, strengths were exhibited by some players, notably Capital One, Nvidia, and UnitedHealth.

Investors are shifting their focus towards European stocks due to Moody’s downgrade of the U.S. government debt, according to CNBC’s Jim Cramer. German and Spanish equity markets have shown significant growth in 2025, while the U.S. S&P 500 has had a turbulent year due to fears about President Trump’s aggressive tariff policies potentially leading to recession. Despite a recovery rally where Trump paused his steep tariffs and U.S.-China tensions cooled, S&P 500 lost 0.3% on Monday.

The yield on the benchmark 10-year Treasury note rose above 4.5% indicating investors are selling U.S. bonds. Moody’s downgrade, from its highest-possible rating to its second-best designation, arises from concerns about the national debt. This could result in higher costs of borrowing for consumers due to higher interest rates. The 30-year U.S. bond yield traded above 5% and the 10-year yield topped 4.5% on Monday.

Top gaining stocks in the aerospace defense industry are Axon Enterprise (AXON) and RTX Corp (RTX). Axon raised its revenue guidance for 2025 due to strong demand for both hardware and software, while RTX focuses on aircraft engines, avionics, missile defense systems, satellites, and cybersecurity solutions.

The main loser in the stock market today is Regeneron Pharmaceuticals, which is acquiring the bankrupt genetic testing company 23andMe for $256 million. This acquisition includes 23andMe’s Personal Genome Service, Total Health and Research Services business lines. This acquisition does not include the company’s telehealth subsidiary, Lemonaid Health.

Ray Dalio, founder of Bridgewater Associates, warns that the risk to U.S. Treasurys is higher than what Moody’s highlighted mainly due to the risk of the government printing money to pay off its debt. The value of the money they’re giving to the bondholders might decrease, resulting in losses in bondholders’ assets.