Rising expectations of a Fed rate cut triggered market volatility, with the three major indices closing divergently. | Walmart's profit warning and US-China tariffs re-emerged as focus.

North American Financial News - U.S. stocks saw mixed performance on Thursday (May 15th), as investors digested data on slowing retail sales and cooling inflation, while also weighing the prospect of a possible Federal Reserve interest rate cut this year. Despite clear signs of an economic slowdown, the Dow Jones Industrial Average and the S&P 500 closed higher, while pressure from technology stocks led to a slight decline in the Nasdaq.

The closing performances of the three major stock indices are as follows:

• The Dow Jones Industrial Average rose 271.69 points, or 0.65%, to close at 42,322.75.

• The S&P 500 index rose 24.35 points, or 0.41%, to close at 5,916.93.

• The Nasdaq Composite Index fell 34.49 points, or 0.18%, to close at 19,112.32.

On the macro level, the latest economic data is boosting market expectations for a Federal Reserve interest rate cut this year . The Producer Price Index (PPI) fell 0.5% month-over-month in April, the first monthly decline since 2023, while year-over-year growth slowed to 2.4%. Meanwhile, the Consumer Price Index (CPI) data showed that overall inflationary pressures have fallen to a near four-year low.

Retail sales data also showed signs of weakness . Month-over-month growth in U.S. retail sales slowed significantly in April, far below the rush to buy in March before tariffs were implemented. This is seen as a sign of weakening consumer spending momentum.

In corporate news, Walmart's stock price fell after it released its quarterly earnings report, saying it would raise prices to cope with tariff costs and noting it wouldn't be able to fully pass on the higher tariffs to consumers.

Meanwhile, the market remained focused on geopolitical and trade policy developments. President Trump's announcement that India had offered to impose zero tariffs on US goods in order to facilitate a trade agreement temporarily soothed market sentiment.

But businesses and policymakers remain cautious about the economic outlook. JPMorgan Chase CEO Jamie Dimon noted that the impact of global tariffs could trigger a recession and warned that excessive market volatility is causing clients to delay investment decisions.

Federal Reserve Chairman Powell reiterated the "high degree of uncertainty," stating that the United States may be entering a new cycle of more frequent supply shocks and more volatile inflation. Vice Chairman Barr added that small businesses face increased pressure under current trade policies, and the risk of supply chain disruptions could further impact economic fundamentals.

In terms of international cooperation, the US government announced that President Trump finalized bilateral cooperation agreements totaling $200 billion during his visit to the UAE, covering areas such as artificial intelligence, semiconductors, and manufacturing. The UAE also plans to invest $1.4 trillion in the US over the next decade.

In the foreign exchange market, the U.S. dollar index retreated. The U.S. dollar index, which tracks the greenback against six major currencies, fell 0.16% to close at 100.878 .

Key stocks:

• UnitedHealth fell for the eighth consecutive day, with a single-day drop of 10.93% and a trading volume of over US$31.7 billion. It has fallen by more than 45% since the beginning of the year, making it the worst-performing component of the Dow Jones Industrial Average.

• Meta fell more than 2% as the delayed launch of its flagship AI model "Behemoth" sparked internal doubts.

• Amazon closed down 2.4% as news of layoffs affected investor sentiment, before recovering partially during the session.

• Tesla, Google and Meta generally fell, and technology stocks were under pressure overall.

• Foot Locker shares surged on news that Dick's Sporting Goods is considering acquiring the shoe retailer for about $2.3 billion .

In addition, **Berkshire Hathaway released its first quarter holdings report (13F)** showing that it has liquidated Citigroup and Nu Holdings, reduced its holdings in Bank of America, maintained its holdings in Apple unchanged, and significantly increased its holdings in Constellation Brands and Occidental Petroleum, without adding any new positions in individual stocks.