Market Recap - Week of May 19 through May 23, 2025
- Gordon Achtermann, CFP®, CSRIC®, MBA
- May 27
- 3 min read
Dear Friends,
The S&P 500 index fell 2.6% this week, pushing the market benchmark back into the red for the year, amid a fresh round of tariff threats from the Trump administration.
The market benchmark ended the week at 5,802.82. The measure remains in positive territory for May with a month-to-date gain of 4.2%, but it is now down 1.3% for the year.
A relief rally last week had put the S&P 500 in the black for the year for the first time since February. The year-to-date gain was short-lived as worries about tariff impacts sent the index back into the red. President Donald Trump threatened to impose a 50% tariff rate on goods from the European Union and said that Apple might have to pay a tariff of at least 25% for iPhones manufactured abroad.
All of the S&P 500's sectors fell for the week. The energy sector had the largest percentage drop, sliding 4.4%, followed by a 3.5% decline in technology, a 3.3% drop in real estate, and losses of 3.1% each in consumer discretionary and financials. The smallest decline was logged by the consumer staples sector, which edged down 0.4%.
Shares of solar companies weighed on the technology sector as US House Republicans passed a tax bill that eliminates important clean energy credits, according to media reports
Last Week
· Leading economic indicators fell 1% in April to 99.4, registering the fifth consecutive monthly decline and the steepest drop since March 2023.
· Existing home sales fell 0.5% last month, sending supply to a 5-year high.
· The count of new single-family home sales rose as builders lowered prices. Data from February and March was revised down in the same report.
S&P 500 Sector and Stylebox Returns


Thought of the week
On May 5, the U.S. Department of Education resumed collections for defaulted federal student loans. This news was accompanied by a dramatic spike in student loans and delinquencies in 1Q25, up to 8.2% from 0.9% in 4Q24, as noted in a recent report from our Investment Bank colleagues.
The resumption of collections is one of the last steps in the reinstatement of student loan payments following their pause from March 2020 to September 2023. After payments were resumed, delinquencies were still not reported to credit bureaus until mid-way through 4Q24, and collections did not begin until 1Q25. Among 42.7 million student loan borrowers, 5 million are now in default, and 4 million are seriously delinquent, threatening to push nearly 25% of the student loan portfolio into default. Newly reported delinquencies have already lowered credit scores for many borrowers, 57% of whom already had subprime credit scores. However, the other 43%, 2.4 million people, had credit scores that previously qualified them for loans but will now face higher borrowing costs, constraining consumers' spending. The resumption of collections on defaulted loans on May 5, with wage garnishments potentially starting this summer, will add to this strain.
Assuming a wide range of interest rates and payment plans, monthly collections on student loans will reduce disposable income by $ 3.1 billion to $ 8.5 billion a month. The resilient consumer, who softened the negative 1Q GDP print with a 1.2% increase in consumer spending, may become more vulnerable moving forward. There are still plenty of consumer positives: the reconciliation bill could provide new tax cuts, the unemployment rate remains low, wages have outpaced inflation rates for the past 25 months consecutively, and gasoline prices remain low. Consequently, consumers may be able to moderate spending growth without it turning into a decline. As market dynamics continue to develop, owning recession diversifiers, such as bonds, and focusing on quality companies with business models that can adapt to a more value-conscious consumer will be key to navigating the evolving economic landscape.
Source: JP Morgan
Up Next
Economic data expected the rest of the week include April consumer spending and personal consumption expenditures, May consumer confidence and consumer sentiment, and the first revision to Q1 gross domestic product, among other reports.
Want more? Here is a link to our latest Monthly Market Update webinar:
All the Best,
Gordon Achtermann, CFP®
703-573-7325
Your Best Path Financial Planning