[New York Stocks] US-China Optimism Fades, Markets Close Mixed... Wholesale Prices Fall, Signs of Weakening Consumption

'Buying Momentum Weakens Amid Market Pause'
April PPI Falls 0.5% from Previous Month
Retail Sales Up 0.1%... Growth Rate Slows
Dimon: "Recession Possibility Not Ruled Out"

The three major indexes on the New York Stock Exchange closed mixed on May 15 (local time). After the initial excitement following the US-China trade agreement subsided, buying momentum weakened and the market maintained a relatively calm trend. On this day, wholesale prices fell unexpectedly sharply, while the growth in retail sales slowed rapidly.

Reuters Yonhap News

On the New York Stock Exchange, the blue-chip Dow Jones Industrial Average (Dow) closed at 42,322.75, up 271.69 points (0.65%) from the previous session. The large-cap S&P 500 index rose 24.35 points (0.41%) to 5,916.93, while the tech-heavy Nasdaq index fell 34.49 points (0.18%) to 19,112.32.

Last weekend, the US and China agreed in their first trade negotiations to lower tariff rates by 115 percentage points each, which eased some concerns in the market about rapid inflation and economic recession. However, after the explosive buying momentum immediately following the trade agreement between the two countries weakened, the market has entered a wait-and-see mode.

Joe Cusick, Senior Vice President and Portfolio Specialist at Calamos Investments, said, "Concerns about a recession have eased and the stock market is building a solid foundation, so the market has shifted to cautious optimism. However, various macroeconomic and microeconomic risk factors persist, so investors must overcome a wall of worry. The next step depends on whether the current upward trend will expand and continue through the summer, or whether the market will enter a correction phase."

The growth in retail sales slowed last month. According to the US Department of Commerce, retail sales in April 2025 totaled $724.1 billion, up only 0.1% from the previous month. This slightly exceeded market expectations, which had projected flat growth. However, the retail sales growth rate plunged from 1.7% in March to 0.1% in April, confirming that consumer sentiment is cooling rapidly.

Wholesale prices fell unexpectedly. According to the US Department of Labor, the Producer Price Index (PPI) for April 2025 fell 0.5% from the previous month. The market had expected a 0.2% increase, but instead, this marked the largest decline in five years, significantly below the March figure (0%). This was attributed to falling service prices, and it is analyzed that companies are absorbing some of the cost burden despite margin pressure from tariff policies. While investors had feared price increases due to aggressive tariff policies, some now suggest that rapidly cooling consumer sentiment may make it difficult for companies to pass tariff costs on to prices.

Jamie Cox, Financial Advisor at Harris Financial Group, said, "If you were expecting stagflation (rising prices amid economic stagnation), these indicators do not support that argument. Growth is slowing, but disinflation (declining inflation rates) is also underway."

Jamie Dimon, the JP Morgan chairman known as the "Emperor of Wall Street," issued a warning about the possibility of a recession. In an interview with Bloomberg TV, Dimon said regarding a recession, "We want to avoid such a situation, but at this point, we are not ruling out the possibility," adding, "If a recession does occur, we do not know how severe or how long it will last."

By stock, Foot Locker surged 85.7% on news of a merger with Dick's Sporting Goods. UnitedHealth fell 10.93% following reports that it is under investigation by the Department of Justice. Nvidia dropped 0.38%. Microsoft (MS) rose 0.23%, while Tesla declined 1.4%.

Government bond yields weakened on news of falling wholesale prices. The yield on the benchmark 10-year US Treasury, a global bond market indicator, fell 8 basis points (1bp=0.01 percentage point) from the previous session to 4.44%. The yield on the 2-year US Treasury, which is sensitive to monetary policy, also fell 9 basis points from the previous day to 3.95%.