Wall Street Rebounds--but One Wrong Move Could Break It All Again

Mega-cap tech rallies, but Trump's tax plans and bond chaos keep investors on edge

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May 22, 2025
Summary
  • Markets bounce—but fragile gains face serious threats from audits, deficits, and rate fears.
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Wall Street caught its breath after a brutal selloff, with the S&P 500 (SPY, Financial) holding steady and the Nasdaq (QQQ, Financial) inching up 0.3% at 10.54am. Big tech did the heavy lifting—Alphabet (GOOG, Financial) added to its recent rally, helping mask weakness in most other sectors. Bond yields, which had sparked the previous day's rout, hovered near 4.59% as traders digested inflation risks, debt load concerns, and an $18 billion TIPS auction on the docket. Bitcoin (BTC-USD, Financial) pierced $111,000, showing risk appetite hasn't disappeared—but that doesn't mean markets are in the clear.

Investors are still processing a wall of policy noise. Trump's renewed tax push is raising fresh deficit alarms. Long-term borrowing costs are already elevated—and if the fiscal math keeps getting worse, the risk premium on U.S. debt could climb. Meanwhile, UnitedHealth (UNH, Financial) and Humana (HUM, Financial) slid after news broke of expanded Medicare audits. And then there's Trump's new line about possibly taking Fannie Mae and Freddie Mac public. That sent both stocks jumping—but also reopened old debates about housing finance reform and market risk.

Corporate headlines offered little comfort. AT&T (T, Financial) is shelling out $5.75 billion to bulk up its fiber network, while Walmart is trimming headcount at HQ to brace for a choppy economy. Snowflake (SNOW, Financial) posted a strong outlook after its product blitz, and Zoom (ZM, Financial) showed surprising strength in enterprise sales. But the losers list was longer: Lenovo's profits cratered 64%, This rebound? It's fragile. Investors aren't out of the woods—just catching their breath.

Disclosures

I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours. Click for the complete disclosure