Stocks moved lower last week as fiscal fears and fresh tariff threats loomed over market sentiment.

The Standard & Poor’s 500 Index fell 2.61 percent, while the Nasdaq Composite Index dropped 2.47 percent. The Dow Jones Industrial Average slid 2.47 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, advanced 1.14 percent.^1,2

Stocks Slip

On Monday, stocks were under a bit of pressure after credit rating agency Moody’s downgraded the U.S. as an issuer of government bonds.^3,4

Stocks remained under pressure midweek as Treasury yields moved higher with the 30-year bond hit a 19-month high. Investors fretted about the budget deficit; some feared the deficit would be made worse by the spending bill winding its way through Congress. After the House of Representatives approved the bill, bond yields backed off their highs and stocks went sideways.^5,6

On Friday, stocks dropped after President Trump warned of a 50 percent tariff on European Union goods following an apparent stall in trade negotiations. At the same time, the administration also threatened a 25 percent tariff on any iPhones manufactured outside of the U.S.⁷

Unexpected Tariff News

The president’s fresh tariff talk ended a week or so of relative tranquility on the trade front. While the EU tariff threat may end with a deal similar to deals with other countries and regions, the iPhone issue may prove stickier.

Some analysts estimate that making iPhones in the U.S. would increase manufacturing costs by as much as 50 percent, which might increase the price of an iPhone.⁸

This Week: Key Economic Data

Monday: Market Holiday

Tuesday: Durable Goods. New York Fed President John Williams and Minneapolis Fed President Neel Kashkari speak. Case-Shiller Home Price Index. Consumer Confidence.

Wednesday: Federal Open Market Committee (FOMC) Meeting Minutes. Neel Kashkari speaks.

Thursday: Gross Domestic Product (GDP). Jobless Claims (weekly). San Francisco Fed President Mary Daly and Chicago Fed President Austan Goolsbee speak. Fed Balance Sheet. Pending Home Sales.

Friday: Personal Consumption & Expenditures (PCE) Index. International Trade Balance in Goods. Atlanta Fed President Raphael Bostic and Austan Goolsbee speak. Retail and Wholesale Inventories. Consumer Sentiment.

^{Source: Investors Business Daily – Econoday economic calendar; May 23, 2025
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.}

This Week: Companies Reporting Earnings

Wednesday: NVIDIA Corporation (NVDA), Salesforce Inc. (CRM)

Thursday: Costco Wholesale Corporation (COST), Dell Technologies Inc. (DELL)

^{Source: Zacks, May 23, 2025. Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.}

“You can’t destroy knowledge. You can stamp it under and burn it up and forbid it to be, but somewhere it will survive.”

– Leigh Brackett

Help Get Your Federal Withholding Correct With This Tool From the IRS

The IRS has a handy tool called the IRS Tax Withholding Estimator to help taxpayers better understand their withholding. It’s essential to examine your federal withholding periodically to ensure you are comfortable with the amount of tax withheld. 

Checking your withholding status may be a good idea to consider if you have experienced a change that may affect your tax status, such as:

• Going through a marriage or divorce

• Having or adopting a child

• Purchasing a new home

• Working two or more jobs at the same time

• Only working part of the year

• Claiming credits such as the child tax credit

This information is not a substitute for individualized tax advice. Please discuss your specific tax issues with a qualified tax professional. 

Tip adapted from IRS⁹

What is Sleep Hygiene?

We all want a better night’s sleep, and your sleep hygiene routine might impact the amount and quality of shut-eye you get. Sleep hygiene refers to your habits to get a good night’s sleep. The better your habits, the better your chances are of improving your sleep. 

Here are some good sleep hygiene tips:

• Be consistent with your sleeping and waking times, even on weekends!

• Make sure your bedroom is dark, quiet, and of a comfortable temperature

• Invest in blackout curtains or a white noise machine to drown out light and sound

• Avoid electronic devices, including phones and TV, at least an hour before bed

• If your appliances have a “night” mode, switch this on a few hours before bed to reduce blue light

• Make sure to get enough exercise during the day, which may help you fall asleep faster

Tip adapted from Centers for Disease Control and Prevention¹⁰

It has dozens of fine teeth, but you can hold it in your hand, and it will never bite you. What is it?

Last week’s riddle: What can go down a chimney when it is down but can’t go up through a chimney when it is up?
Answer: An umbrella.

View of Guatapé
Piedra del Peñol, Colombia

Stocks roared higher last week, powered by upbeat trade news and tame inflation reports.

The Standard & Poor’s 500 Index rose 5.27 percent, while the Nasdaq Composite Index spiked 7.15 percent. The Dow Jones Industrial Average added 3.41 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, increased 0.80 percent.^1,2

S&P, Dow Erase YTD Losses

Stocks pushed higher on Monday as investors cheered weekend news that the U.S. and China temporarily agreed to back off steep reciprocal tariffs.³

Then, a mild inflation report for April—the slowest annualized Consumer Price Index (CPI) reading in four years—boosted markets on Tuesday. Tech stocks powered the rally as the S&P 500 closed trading in the green for the year.^4,5

Markets closed the week with modest gains, largely looking past weak consumer sentiment data released on Friday.

Friday was the Dow’s turn to erase year-to-date losses and get back in the green while the Nasdaq and S&P notched a five-day winning streak.⁶

All Eyes on Economic Data

The retail (CPI) and wholesale inflation reports (Producer Price Index) were mild, although most economists didn’t expect tariffs to impact prices in the first month of implementation.

Retail sales ticked up slightly (as expected), while industrial production and housing starts showed signs of tariff impact.^7,8

Expect traders to continue to closely watch economic reports to better understand whether tariffs are showing up in the data.

This Week: Key Economic Data

Monday: New York Fed President John Williams, Dallas Fed President Lorie Logan, and Atlanta Fed President Raphael Bostic speak. Leading Economic Indicators. E-Commerce Retail Sales.

Tuesday: Richmond Fed President Thomas Barkin, Raphael Bostic, and Fed Governor Adriana Kugler speak. Financial Markets Conference.

Wednesday: Thomas Barkin speaks. 20-Year Treasury Bond Auction.

Thursday: Existing Home Sales. Jobless Claims (weekly). PMI Composite—Services and Manufacturing. John Williams speaks. Fed Balance Sheet.

Friday: New Home Sales. Kansas City Fed President Jeff Schmid and Fed Governor Lisa Cook speak.

^{Source: Investors Business Daily – Econoday economic calendar; May 16, 2025
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.}

This Week: Companies Reporting Earnings

Tuesday: The Home Depot, Inc. (HD), Palo Alto Networks, Inc. (PANW)

Wednesday: The TJX Companies Inc. (TJX), Lowe’s Companies, Inc. (LOW)

Thursday: Intuit Inc. (INTU), Analog Devices, Inc. (ADI), The Toronto Dominion Bank (TD), Workday, Inc. (WDAY)

^{Source: Zacks, May 16, 2025. Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.}

“People always call it luck when you’ve acted more sensibly than they have.”

– Anne Tyler

The IRS May Send You One of Two Notices If Your Filed Returns Don’t Match Their Records

Have you wondered what happens if the information on your tax return doesn’t match the IRS records? The IRS mails out two notices, CP2100 and CP2100A, to banks, credit unions, businesses, and payers who may have made a mistake on their return. 

The IRS mails these notices out twice yearly, in September/October and April of the following year. Payers may receive a notice if their return lacks a Taxpayer Identification Number, has an incorrect name, or both. The notices also tell payers that they are responsible for backup withholding.

This information is not a substitute for individualized tax advice. Please discuss your specific tax issues with a qualified tax professional. 

Tip adapted from IRS⁹

This Cognitive Behavioral Exercise Can Help Quiet Your Negative Self-Talk

We all have that little negative voice in our heads, and one way to combat it is to change how we think about situations. Stressful things will always happen, but the goal is to change your feelings about those stressful situations. 

To practice this exercise, separate a piece of paper into three columns. One is for your negative thoughts, one is for the cognitive distortion at play, and one is for your rational response (thinking logically about your feelings). Here’s an example:

Negative thought: I did horribly on my presentation today and am getting fired. 
Cognitive distortion: All-or-nothing thinking, jumping to conclusions.
Rational response: Maybe it wasn’t my best presentation, but overall, the quality of my work is good.

These cognitive exercises take a lot of practice but can help silence your inner critic.

Tip adapted from Healthline¹⁰

What can go down a chimney when it is down but can’t go up through a chimney when it is up?

Last week’s riddle: What always shows up in the middle of March and the middle of April?
Answer: The letter “R.”

Ring-neck Pheasant
Utah, United States

Stocks ended the week with a strong gain as traders continued to focus on tariff talks while appearing to overlook upbeat news on inflation.

The Standard & Poor’s 500 Index rose 5.70 percent, while the Nasdaq Composite Index gained 7.29 percent. The Dow Jones Industrial Average picked up 4.95 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, increased by 0.72 percent.^1,2

Stocks Rebound

Stocks rallied on Monday after a report surfaced that the administration was considering a 90-day pause on tariffs. But when the White House clarified its position, sellers stepped in.

On Tuesday, prices jumped at the next opening bell after the Treasury Secretary said the U.S. was open to tariff negotiations with trading partners. The rally stalled and reversed on news the administration was adjusting tariffs on Chinese imports.³

After the White House announced a 90-day pause on specific tariffs on Wednesday, markets pushed higher. The S&P 500 gained 9.5 percent, its largest one-day increase in 17 years.⁴

Stocks fell again Thursday morning, appearing to overlook an upbeat Consumer Price Index report showing that core inflation (excluding food and energy) rose at a 2.8 percent annual rate–the best number in more than four years. Stocks finished the week with a powerful rally, capping a volatile trading week.^5,6

Watching the Bond Market

The yield on the 10-year Treasury rose more than 50 basis points for the week, marking one of the most significant moves on record. (When bond yields increase, bond prices tend to move lower.)

The week’s action was unexpected. In the past, investors have turned to U.S. bonds during market turbulence. However, the ongoing tariff talks have, at least temporarily, influenced how some overseas investors view U.S. bonds.^7,8

The bond market activity influenced the mortgage market, where the average rate on the popular 30-year fixed mortgage closed Friday at 7.1 percent, its highest level in two months.⁹

This Week: Key Economic Data

Monday: Philadelphia Fed President Patrick Harker and Atlanta Fed President Bostic speak.

Tuesday: Import Price Index.

Wednesday: Retail Sales. Industrial Production. Business Inventories. Home Builder Confidence Index. Cleveland Fed President Hammack speaks.

Thursday: Housing Starts. Building Permits.

Friday: San Francisco Fed President Mary Daly speaks.

^{Source: Investors Business Daily – Econoday economic calendar; April 11, 2025
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.}

This Week: Companies Reporting Earnings

Monday: The Goldman Sachs Group, Inc. (GS)

Tuesday:  Johnson & Johnson (JNJ), Bank of America Corporation (BAC), Citigroup Inc. (C)

Wednesday: Abbott Laboratories (ABT), Prologis, Inc. (PLD)

Thursday: UnitedHealth Group Incorporated (UNH), Netflix, Inc. (NFLX), American Express Company (AXP), Marsh & McLennan Companies, Inc. (MMC), The Blackstone Group (BX), Infosys (INFY)

^{Source: Zacks, April 11, 2025. Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.}

– Harold Pinter

Tax Tips for Farmers

If you own a farm, ranch, range, or orchard, here are some tax tips to consider:

• Insurance payments from crop damage may count as income. Check with your tax professional.
• If you sold livestock or items you bought for resale, you may have a taxable event.
• You may be able to deduct ordinary and necessary expenses that you paid for your business.
• Consider the tax treatment of your farm’s full and part-time workers.
• If your expenses are more than your income for the year, you may have a net operating loss. You may be able to carry that loss over to other years.

This information is not a substitute for individualized tax advice. Please discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS¹⁰

How to Measure Your Heart Rate (Without a Smart Device)

There are so many smart gadgets to help us monitor our health, but knowing how to measure your heart rate without any tech is important to monitor your overall health.

• To measure your heart rate, gently place your index and middle finger on a pulse point, such as your wrist right below the base of your thumb or your neck right under your jawbone.
• Lightly press until you can feel your heartbeat, then count the number of beats in 15 seconds. You’ll need a watch or clock to time yourself.
• Multiply this number by 4 to get your heart rate per minute.
• Feel free to repeat this exercise a few times to confirm your reading’s accuracy.

Tip adapted from Harvard Medical School¹¹

Last week’s riddle: I can certainly run, but I will never be able to walk by myself. Wherever I go, thoughts are close behind me. What am I?
Answer: A nose.

Footnotes and Sources

^{1. The Wall Street Journal, April 11, 2025}

^{2. Investing.com, April 11, 2025}

^{3. CNBC.com, April 8, 2025}

^{4. The Wall Street Journal, April 9, 2025}

^{5. The Wall Street Journal, April 10, 2025}

^{6. MarketWatch.com, April 11, 2025}

^{7. WSJ.com, April 9, 2025}

^{8. MarketWatch.com, April 9, 2025}

^{9. CNBC.com, April 11, 2025}

^{10. IRS.gov, June 4, 2024}

^{11. Harvard Medical School, December 12, 2024}