Markets faced a challenging week ending May 24, 2025, with broad declines across major U.S. indices, including the S&P 500 (-2.61%), Dow Jones (-2.47%), and NASDAQ (-2.47%). Investor sentiment was shaken by policy volatility, especially the abrupt tariff changes from former President Trump, which created a jolt in the market. While these headline-driven swings may be wearing thin, PVG Asset Management suggests that markets are adjusting to the theatrics, viewing them as part of a broader negotiation strategy. Key drivers to watch for a potential market rally include strong second-quarter earnings, improved corporate guidance, a narrowing budget deficit, and stabilization in bond yields. Notably, sectors like technology remain pivotal, with specific attention on companies like NVIDIA.

Looking ahead, optimism is building around economic acceleration in the latter half of 2025 and into 2026, largely driven by large-scale capital investment initiatives. If executed, these plans could trigger a surge in U.S. manufacturing and technology spending, including robotics, defense, and autonomous vehicles. However, geopolitical developments—such as the Russia-Ukraine conflict and rising tensions with Iran—remain critical watchpoints. Domestically, the market continues to monitor long-term Treasury yields and inflation trends, although recent data suggests limited inflationary pressure. Additionally, the biotech sector appears oversold and potentially poised for a rebound, signaling select opportunities for concentrated, research-driven investments.

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