Last Week on Wall Street – May 24th, 2025

S&P 500: -2.59% DOW: -2.43% NASDAQ: -2.45% 10-YR Yield: 4.51%

What Happened?

Markets retreated last week as investor sentiment soured under the weight of rising bond yields and renewed geopolitical tension. The 10-year Treasury yield surged toward highs not seen in months, signaling growing concern that inflation may prove more persistent than the Fed or markets had hoped. Higher yields mean higher borrowing costs, and that’s beginning to ripple through valuations, particularly in rate-sensitive sectors like tech and real estate.

At the same time, trade fears returned to center stage. President Trump floated fresh tariff threats, this time targeting the European Union, America’s largest trading partner. The move, more bluster than policy for now, still managed to shake markets already uneasy about the global growth outlook. Tariffs are once again a wildcard, with the potential to pressure supply chains and rekindle recessionary fears.

Layered on top of all this was the rollout of Trump’s “Big Beautiful Bill,” a sweeping economic package pitched as a catalyst for American growth. But while the headlines are bold, analysts are questioning whether the promised stimulus can overcome real-world implementation delays and inflationary headwinds.

Below, we’ll dive deeper into the effects of rising yields, new tariff threats on America’s key trade partners, and what Trump’s economic ambitions could mean for markets heading into summer.

Why Treasury Yields Are Rising

10-year U.S. Treasury yields approaching 4.6%.
30-year U.S. Treasury yield surged above 5%.
Markets are pricing in uncertainty amid tariff and trade negotiations, seeking to earn more than what is currently offered.

The key takeaway – Yields on U.S. Treasuries are spiking, and that says a lot more than just “bonds are being sold.” When bond prices fall, yields move in the opposite direction, and lately, that movement has been hard to ignore. This kind of sharp upward move often reflects a shift in investor sentiment, as markets recalibrate expectations for growth, inflation, and Fed policy.

Why does this matter? Treasuries are seen as the baseline for “risk-free” returns. If yields are climbing, it’s typically because investors are demanding more compensation for locking up their money, especially in a climate where inflation (and tariff-induced cost pressures) threatens to erode real returns. No one wants to be stuck earning 3% if inflation is running closer to 4%.

In short: the sell-off in bonds is less about pessimism and more about recalibration. Investors are repositioning portfolios with an eye on inflation, policy, and purchasing power. The message from the bond market? The economy might still be resilient, but the cost of money, and the price of certainty, is going up.

Trump threatens steep tariffs on European Union goods, targets iPhones

The Trump Administration threatens up to 50% on the EU as they are “hard to deal with”
The Trump Administration threatens Tim Cook, CEO of Apple, of an additional 25% import tax if Apple does not move manufacturing to the United States

The key takeaway – Markets got rattled again this week as former President Trump took to Truth Social, suggesting new tariffs on the European Union, calling them “difficult to deal with” in ongoing trade talks. The EU, notably the U.S.’s largest trading partner, was quick to land back on investor radars.

While no official policy has changed, the mere suggestion was enough to spark volatility and stir up recessionary concerns. Investors have seen this movie before: trade war headlines, algorithmic selling, and safe-haven flows. The real tension? The EU’s internal complexity, 27 member nations, each with their own economic priorities, trying to land on a unified response.

Adding fuel to the fire, Trump floated the idea of slapping a 25% tariff on Apple if the tech giant were to shift manufacturing back from India to the U.S., a move that, ironically, could punish the very act of reshoring. Analysts say Apple would likely have to absorb those costs rather than pass them fully to consumers, as a domestically built iPhone could see production costs soar. That would put pressure on Apple’s margins and, more broadly, tech sector earnings, adding yet another layer of uncertainty to markets already jittery about inflation and global trade.

What the ‘big, beautiful bill’ means for economic growth

President Trump’s plan to help boost the U.S. Economy by promoting corporate investment and household spending.
Many analysts have varying opinions of the effectiveness of the plan, and how much it would actually affect GDP growth.

The key takeaway – The Trump Administration rolled out what it’s calling the “Big Beautiful Bill” this week, a sweeping economic package aimed at jumpstarting growth, boosting American industry, and reviving post-pandemic momentum. While the bill is still in its early stages, headlines are already painting it as a cornerstone of Trump’s renewed economic push.

Markets responded with cautious optimism. Infrastructure, energy, and industrials saw early gains, reflecting hopes for capital deployment and job creation. But not everyone’s sold. Analysts were quick to point out that while the bill carries a big name and even bigger spending promises, its actual stimulative power may be more muted than advertised.

Much of the proposed spending is spread over years, with many projects requiring state-level cooperation and regulatory hurdles that could delay real impact. Others note that the economy is already running near capacity in several sectors, meaning stimulus might push inflation rather than growth.

While the bill could support select sectors and sentiment in the short run, the jury’s still out on whether it delivers the kind of broad-based acceleration markets are pricing in. In typical fashion, Wall Street is reacting to the headline, while Main Street will be waiting on the execution.