TheDrop Market Analysis, 05/20/25

Markets sank as economic uncertainty looms.

The Nasdaq fell 0.4%, the S&P 500 fell 0.4%, and the Dow fell 0.3%. Generally, index funds across the board, even the Russell 2000, performed poorly leading into the after-hours, with these stocks showing very minimal signs of recovery.

Home Depot, after missing the mark in its latest fiscal earnings report, slumped today, showing little signs of correction due to its steep decrease in share price in recent days.

Mag. 7 stocks performed very poorly, with Tesla making the sole improvement in share price, perhaps because the company fell so significant and correction is due; in addition, Tesla CEO Elon Musk has stepped down from DOGE to prioritize the management of his company, possibly issuing a new era of consolidation for the weakening EV producer. Nevertheless, the stock has remained fairly resilient in recent days as it encounters selling pressure due to strong competition in the EV market. Musk, however, believes that Tesla could manage the storm.

In a broader lens, stocks performed abysmally today due to the fact that economic indicators are showing negative signs for the economy. Although tariff negotiations are underway, the current impact of tariffs has been detrimental in both the health of the economy but also the confidence of consumers. As companies continue to be pressured to adapt in the gathering storm and perhaps even a black swan event, the laying off of employees and price hikes have made Americans feel scared or anxious about the current state of the economy.