Wall Street opened the second half of 2025 with mixed results, as investors rotated away from technology stocks and into health care and financials. The Dow Jones Industrial Average stood out, climbing 400 points, or 0.91%, to finish at 44,494.94. Meanwhile, the S&P 500 edged down 0.11% to 6,198.01, and the Nasdaq Composite lost 0.82%, closing at 20,202.89.
The moves follow a strong second quarter driven by tech, with the Nasdaq gaining nearly 18% and the S&P up over 10%. But Tuesday’s action suggested a pause. Nvidia and Microsoft slipped, while health-care giants led gains. Amgen and UnitedHealth rose more than 4%, Merck added over 3%, and Johnson & Johnson advanced nearly 2%.
Banks rally as dividends rise
Financials also surged, with the KBW Bank Index up 1.5%, its highest close since February 2022. The index posted a ninth straight day of gains, its longest winning streak on record. Western Alliance, East West Bancorp, and Zions Bancorp led the charge.
After hours, JPMorgan Chase announced a new US$50bn share buyback and a dividend hike to US$1.50 per share. Bank of America and Wells Fargo also lifted their payouts.
Trump’s megabill and Fed rate signals
Markets digested more fiscal and monetary signals Tuesday. The Senate narrowly passed President Trump’s US$3.3 trillion tax and spending bill in a 51–50 vote. The bill now returns to the House, with Trump aiming to sign it within days.
Speaking in Portugal, Federal Reserve Chair Jerome Powell said rate cuts likely would have continued if not for the inflationary effects of tariffs. “We went on hold when we saw the size of the tariffs,” he noted, adding that future moves would be data-dependent.
Tesla stumbles on Trump feud
Tesla shares dropped 5.3% after Trump suggested government subsidies for Elon Musk’s companies should be reviewed. The president also took aim at Musk’s immigration status, escalating tensions after Musk called the bill “utterly insane and destructive” over the weekend.
Euro run pauses as dollar firms
The euro trimmed gains after touching its highest level since 2021, still notching its longest winning streak against the US dollar since 2004. Traders cited the Senate bill’s passage and strong labour data as reasons for dollar strength, though Brown Brothers Harriman’s Win Thin cautioned the longer-term implications may be dollar-negative.
Australian market
Australian shares are poised to open higher, with ASX futures pointing up 18 points, or 0.2%, to 8,558, tracking Wall Street’s gains. However, attention will remain on the Trump-Musk rift and upcoming retail and building approvals data. NAB is forecasting a 0.6% rise in May retail sales.
