Stock Market Summary – May 26, 2025

In this week’s stock market news, the US S&P 500 index dropped by 2.6%, with similar weekly performance observed in the Nasdaq, which fell by nearly 2.5%. These drops follow Trump’s stepping up pressure on Apple over foreign-made iPhones and intensifying the overall stock market sell-off.

In particular, Apple was the worst-performing stock of the week, down nearly 7.6%, falling out of the $3 trillion US market capitalization club, now occupied only by Microsoft and Nvidia. Trump hinted the possibility of a 25% tariff on iPhones not made in the US and called for a similar tariff on the European Union.

The US stock market has faced significant pressure from the spike in bond yields, seeing the 10-year Treasury yields going back to mid-February highs above 4.6%.

European stocks saw positive results with the French CAC 40 adding 1.2% and Germany’s DAX rising by 1.6%. These positive performances followed President Trump’s decision to delay the 50% tariffs on the European Union to July 9.

Chinese electric vehicle manufacturer BYD saw a drop of 8.25% in the share price following its decision to slash prices on 22 electric and plug-in hybrid models until the end of June. Other Chinese automakers, such as Geely Automobile, Great Wall Motor Co, Li Auto, and Xpeng, also saw a decline in their share prices.

Chinese tech giant Xiaomi is targeting Tesla’s prominent position in China’s electric vehicle sector with its new electric SUV, the YU7. The car can go 760 kilometers on a single charge, surpassing Tesla’s Model Y’s 719 km, making it a strong competitor for consumers worried about frequent battery charging. YU7 is expected to be priced around $34,700 – $44,420, hitting the same price point as the Model Y, and aiming to erode Tesla Model Y’s market share in China.

In financial news, US President Donald Trump has temporarily delayed his plans for a 50% hike in tariffs on the European Union. Expected to be enforced from June 1, the deadline has been pushed back to July 9. While the tariff news initially caused concern, major U.S. and European stock indexes showed little reaction, indicating that investors are less troubled by Trump’s tariff declarations, considering them more of a negotiation strategy. Despite this, all major markets, the S&P 500, Dow Jones Industrial Index, and Nasdaq Composite, dropped more than 2% over the past week. Treasury yields also rose due to Trump’s new tax bill, expected to add $2.3 trillion to the federal deficit.

The temporary pause in tariff increases positively influenced the Asian-Pacific market too, with South Korean stocks leading the region with a 2% surge. Meanwhile, the U.S Federal Reserve is expected to maintain interest rates for some time, according to Minneapolis Federal Reserve President Neel Kashkari. This is due to the effects of higher tariffs not yet being reflected fully in the housing market and other economic indicators.

Overall, while market sensitivity to trade tariffs seems to be decreasing, the financial landscape remains subject to geopolitical developments and the introduction of major technological competitors in several sectors.