Global Market News
Global Equities Higher
Global equities rose over the last week. The S&P 500 and Nasdaq rose 5.27% and 7.15%, respectively, and the Dow Jones rose by 3.41% on the week. The U.S. 10-year Treasury note rose slightly, closing the week at 4.48%. Meanwhile, oil prices increased, with a barrel of West Texas Intermediate crude closing Friday at $62.49. Over the last five days, volatility, as measured by the CBOE Volatility Index, dropped more than 6% to end the week at 17.24.
Moody’s Downgrades US Credit Rating
Additionally, Moody’s has downgraded the US credit rating from Aaa to Aa1, citing persistent fiscal deficits and rising government debt. The agency noted that successive administrations have failed to curb spending, projecting U.S. debt to reach 134% of GDP by 2035. While the downgrade reflects growing financial strain, Moody’s maintained a stable outlook, recognizing the resilience of the U.S. economy and the dollar’s global reserve status.
International Developments
Trump’s Gulf Tour Sparks Syria Shift, Big Business Deals, and Iran Diplomacy
During his May Gulf tour, President Trump visited Saudi Arabia, Qatar, and the UAE—meeting leaders and announcing U.S. business deals totaling up to $4 trillion, including a $96 billion Boeing agreement with Qatar. On May 14, Trump met Syria’s new president, Ahmed al-Shara, a former jihadist rebel leader, and pledged to lift U.S. sanctions—a sharp reversal of past U.S. policy. He also signaled openness to renewed nuclear talks with Iran, thanking Qatar for mediating and amplifying Tehran’s call for better U.S. relations. Though he avoided visiting Israel, Trump unexpectedly acknowledged civilian suffering in Gaza, while staying clear of the Russia-Ukraine cease-fire talks happening in Turkey.
Russia, Ukraine Hold First Direct Talks Since 2022
On May 16, Russian and Ukrainian delegations met in Istanbul’s Dolmabahçe Palace for their first direct peace talks in three years, under pressure from President Trump, who has pushed President Zelensky to agree to a 30-day cease-fire. Ukrainian Defense Minister Rustem Umerov led Kyiv’s team, while Russia sent a lower-level delegation led by former Culture Minister Vladimir Medinsky—drawing criticism from U.S. and European leaders, including Germany’s Chancellor Friedrich Merz. Despite fresh Russian missile strikes near Dnipro during the talks, Trump announced from the UAE that he seeks a one-on-one summit with President Putin “as soon as we can set it up.” Ukraine demands a full cease-fire and humanitarian measures, while Russia wants to revive 2022 proposals that Kyiv and its allies reject as unacceptable.
China Unveils $9 Billion Bid to Deepen Ties with Latin America and the Caribbean
At the China-CELAC Forum in Beijing on May 13, President Xi Jinping pledged 66 billion yuan ($9.18 billion) in credit and additional corporate investment to strengthen China’s role in Latin America and the Caribbean. Trade between China and CELAC reached a record $515 billion in 2024, with Brazil alone accounting for nearly half of Chinese imports from the region. Key leaders including Brazil’s President Lula da Silva and Colombia’s President Gustavo Petro attended, as Xi also promised visa-free travel to five unspecified nations and a new action plan extending cooperation to 2027. China’s strategy includes boosting yuan-based transactions and expanding influence through infrastructure and trade, though some CELAC members, like Panama, are reconsidering their Belt and Road participation.
US Social & Political Developments
GOP Rebels Stall $3.7 Trillion Trump Tax Bill Amid Budget Fight
Five House Republicans joined all 213 Democrats to block President Trump’s $3.72 trillion tax bill on Friday, demanding deeper cuts to Medicaid and a full repeal of green energy tax breaks. The bill, which includes extending the 2017 tax cuts and a “no tax on tips” provision, is projected to increase the federal deficit and push debt-to-GDP beyond 125% over the next decade. Critics say the bill disproportionately benefits high-income earners, while millions risk losing health coverage due to proposed Medicaid and Affordable Care Act reductions. Despite Trump’s calls to “GET IT DONE,” internal GOP divisions—between fiscal hardliners and moderates concerned about constituent backlash—have stalled momentum for what was intended to be a major domestic policy win.
Supreme Court Weighs Limits of Nationwide Injunctions Amid Trump Citizenship Order
On May 15, the U.S. Supreme Court heard arguments not on the merits of former President Trump’s executive order denying birthright citizenship to children of undocumented migrants, but rather on whether a single district judge can issue a nationwide injunction to block such policies. U.S. Solicitor General D. John Sauer argued that nationwide injunctions—now averaging 10 per month—are historically rare and legally problematic, while Justice Clarence Thomas questioned their legitimacy, noting their rise only since the 1960s. New Jersey Solicitor General Jeremy Feigenbaum warned of chaos if citizenship varied by state, with implications for benefits and deportation risk. Justices Kagan and Gorsuch raised concerns about enforcement loopholes, suggesting the government might avoid Supreme Court review to prolong the policy’s effects unless a class action or binding ruling is forced.
Corporate/Sector News
Dick’s Sporting Goods-Foot Locker Merger Triggers Market Jitters
On May 15, Dick’s Sporting Goods announced a $2.5 billion deal to acquire Foot Locker, offering shareholders either $24 in cash or 0.1168 Dick’s shares per Foot Locker share. Foot Locker stock soared 86%—its biggest gain on record—while Dick’s fell 14.6%, its steepest drop since August 2023, amid analyst skepticism over integration risks and retail merger failures. The deal, expected to close in the second half of 2025, would expand Dick’s footprint to 3,250 stores and boost its Nike inventory exposure from 24% to 38%. UBS and TD Cowen analysts cautioned that cultural and operational differences, plus Foot Locker’s recent struggles, may outweigh projected $100–$125 million in synergies.
UnitedHealth Faces DOJ Criminal Probe Amid Executive Turmoil and Stock Rout
The U.S. Department of Justice is conducting a criminal investigation into UnitedHealth Group over possible Medicare Advantage fraud, with the active probe managed out of its New York healthcare-fraud unit since at least mid-2024. This comes alongside ongoing civil and antitrust inquiries, and follows the abrupt May 2025 CEO change from Andrew Witty to former CEO Stephen Hemsley. UnitedHealth’s stock has plunged over 50% in the past month—falling 16% on May 15 alone—amid broader investor concerns about billing practices and executive stability. The investigation coincides with federal cost-cutting pressures and scrutiny from lawmakers like CMS head Mehmet Oz, who pledged a Medicare Advantage crackdown during March Senate hearings.
Trump Sparks $60B+ AI Investment Surge in Gulf States During Riyadh Forum
During President Donald Trump’s May 13 visit to Riyadh, sweeping U.S.-backed AI investment deals were unveiled, totaling over $60 billion across Saudi Arabia and the UAE. Saudi firm Humain will receive hundreds of thousands of Nvidia chips—including 18,000 Grace Blackwell GB300s—and lead multibillion-dollar partnerships with AMD, Amazon (AWS), Cisco, Qualcomm, and Global AI, while Super Micro announced a $20 billion server deal with Saudi firm DataVolt. The UAE is negotiating a U.S.-approved import of 1 million Nvidia chips by 2027, with OpenAI planning a major regional data center and G42 set to receive 20% of the chips annually. The Trump administration also formally repealed Biden-era AI chip export restrictions, marking a decisive shift in U.S. AI diplomacy with Gulf allies.
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Ukraine and Russia Discuss Cease-Fire, Meeting of Leaders in Peace Talks
Source: The Wall Street Journal
