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A Flat Friday to End a Magnificent May
RiskReversal Recap: Friday, May 30th
RiskReversal Media
May 30, 2025
MARKET WRAP
A late-day rally mostly made up for earlier losses to finish off a very good month of May for stocks. The day began under pressure with a reminder that no trade deals have actually been finalized, alongside accusations that China had “totally violated” the conditions of the pause. The dip was bought once again, but some of that strength may have been due to month end factors (more on that below). On the day: SPX -0%, QQQ -0.1% and IWM -0.4%. The 10YY was slightly lower and ends the month at 4.40%. The dollar was slightly higher with DXY ending May at $99.40.
After hours: SPY is down slightly with potential after hours pinning around the 589 strike.
RiskReversal Pod: Michael Contopoulos of Richard Bernstein Advisors joins the show to discuss the Federal Reserve's next moves, inflation, and the potential for stagflation. The discussion also delves into AI effects on productivity and employment, the role of private credit markets, and recent trends in gold prices.
MRKT MATRIX: TODAY’S TOP STORIES
S&P 500 is flat Friday, but best month since 2023 as investors continue to look past trade policy confusion (CNBC)
S&P 500’s Banner Month Faces Off With June’s Lackluster Record (Bloomberg)
Bessent Says US-China Talks ‘Stalled,’ Pushes for Trump-Xi Call (Bloomberg)
Trump accuses China of violating preliminary trade deal (CNBC)
Trump’s Tariff Options Slower, More Complex If Court Fight Fails (Bloomberg)
Google’s Future Awaits Judge’s Ruling (WSJ)
US Treasuries Set for First Monthly Loss of 2025 on Deficit Woes (Bloomberg)
Gap Sinks on Tariff Hit Warning, Weakness at Smaller Brands (Bloomberg)
Evercore ISI hikes Netflix price target, says stock can march to new heights thanks to live events (CNBC)
WHAT’S NEXT?
Today could have been worse. The market appeared to be rolling over early but a couple of end of the month factors may have saved the day. The first was the concentration of options open interest around the SPX 5900 strike. That clearly acted as a bit of a magnet as a large Friday expiry approached, dragging the SPX higher from its intraday lows. The other was end-of-month marking, particularly as the rally picked up steam. The first day of the month can also see some unnatural flows, so we’ll see how Monday’s trading follows through.
Speaking of the end of the month, the S&P 500 gained nearly 7% in May. This week alone, the index added nearly 2%. However, beneath those numbers, the past two weeks have been essentially flat, with the sharp “V” reversal off the April lows seemingly stalled for now.
While the rally stalled, implied volatility also appears to have found a floor. The VIX, which had dipped to around 17 two weeks ago, spent most of this week around 20.
Looking ahead, the expiration of the tariff pause on July 9th will begin to loom large in just a few weeks. While traders aren’t pricing in much volatility to start June, things are likely to pick as we get closer to July.
We’ll be back this weekend with a preview of next week, including how traders are pricing next Friday’s jobs number, Broadcom’s earnings, and more. Check your inbox Sunday!
TODAY’S EPISODES
Watch RiskReversal Podcast’s newest episode: Less Certainty, More Volatility for Markets with Michael Contopoulos
Dan Nathan and Guy Adami have a detailed discussion with Michael Contopoulos, Deputy Chief Investment Officer at Richard Bernstein Advisors, about the current market landscape. They explore the challenges of market volatility, the impact of tariffs, and interest rates. The conversation touches on the Federal Reserve's potential moves, inflation, and potential stagflation. They also delve into the implications of AI on productivity and employment, the role of private credit markets, and the recent trends in gold prices. The episode emphasizes the importance of understanding macroeconomic factors and market sentiment in navigating the current economic environment.
Timecodes 0:00 - Rate Picture 10:10 - Japan 13:10 - TACO Trade 17:15 - High Yield 19:45 - Private Credit 21:40 - Foreign Markets 23:25 - Earnings 26:25 - Inflation 29:55 - AI Effect 34:05 - Gold 36:10 - Meddling & Recessions 39:20 - On Your Radar
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