The S&P 500 (Index: SPX) had its best week to date in 2025, rising 4.6% to close out the trading week ending on Friday, 25 April 2025 at 5,525.21.

It was an especially good week for the index' mega-cap Big-Tech stocks, with much of the increase of the index driven by their outsized concentration within it. Here's a quick summary of how much the share prices of the S&P 500's Top 10 stocks changed over the preceding week:

• Apple (NASDAQ: AAPL) $209.28 (+7.8%)
• Microsoft (NASDAQ: MSFT) $391.85 (+7.9%)
• Nvidia (NASDAQ: NVDA) $111.01 (+13.4%)
• Amazon (NASDAQ: AMZN) $188.99 (+12.2%)
• Meta Platforms (A) (NASDAQ: META) $547.27 (+11.8%)
• Berkshire Hathaway (B) (NYSE: BRK.B) $530.96 (+2.4%)
• Alphabet (A) (NASDAQ: GOOGL) $161.96 (+9.1%)
• Broadcom (NASDAQ: AVGO) $192.31 (+14.8%)
• Alphabet (C) (NASDAQ: GOOG) $163.85 (+8.8%)
• Tesla (NASDAQ: TSLA) $284.95 (+24.2%)

One of these stocks is not like the others, as Berkshire Hathaway is not a member of the mega-cap Big-Tech club, which makes it a representative of what the stocks of the rest of the index experienced on average during the week. As for the mega-cap Big Tech club, most of these stocks have been hammered during the year-to-date going into the week, with many having been taken down with the deflation of the AI bubble after the 21 February 2025 announcement the code behind China's DeepSeek artificial intelligence system would be made open source.

The change in fortune for these firms is such we may need to consider whether another new market regime is taking shape. The current market regime took hold after 21 February 2025, which is something we'll be evaluating behind the scenes for the dividend futures-based model over the next weeks. We'll also be weighing whether investors have shifted their forward-looking focus from the current quarter of 2025-Q4 toward the more distant investment horizon of 2025-Q4.

Speaking of the dividend futures-based model, here's the latest update of the alternative futures charts. We find the trajectory of the S&P 500 has soared above the redzone forecast range, which we've extended two weeks longer to account for the ongoing high volatility of stock prices.

We're considering the potential of an outward shift in the time horizon of investors because earnings season is now underway, in which companies are projecting their outlooks through the end of the current year, and because of recent changes in investor expectations of rate cuts during 2025-Q4.

On that count, the CME Group's FedWatch Tool projects the Fed will still hold off in resuming its cuts of the Federal Funds Rate until the conclusion of its 18 June (2025-Q2) meeting, at which time it will reduce this interest rate by 0.25%. Afterward, the FedWatch Tool forecasts the Fed will reduce U.S. interest rates three more times before the end of 2025, which is a development that's taken place during the last two weeks. The FedWatch Tool foresees 0.25% cuts in the Federal Funds Rate on 30 July (2025-Q3), 29 October (2025-Q4), and 10 December (2025-Q4).

Here are the market-moving headlines that informed investor expectations during the past week.

Monday, 21 April 2025

• Signs and portents for the U.S. economy:
• Trump warns of economic slowdown unless Fed cuts rates, triggering selloff
• Trump renews attack on Federal Reserve Chair Powell, Dow Jones tumbles 1,000 points
• Oil falls over 2% on signs of progress in US-Iran talks, demand fears
• Fed minions say persistent Bidenflation keeping them from cutting U.S. interest rates:
• With inflation progress slow, Fed's Daly says rate cuts may need to wait
• Fed's Goolsbee hopes US not moving to where monetary independence is questioned
• Bigger trouble developing in China after pre-tariff export push:
• China's export controls are curbing critical mineral shipments to the world
• China's fiscal revenue falls 1.1% in January-March
• China's Q1 automobile exports up 16% y/y, industry official says
• China central bank urges state-owned businesses to prioritise yuan in overseas expansion
• BOJ minions say they'll keep hiking Japan's interest rates if inflation remains on track, but core inflation picks up speed:
• BOJ will keep raising rates if inflation on track, Governor Ueda says
• Japan's core inflation accelerates, complicating BOJ's rate path
• ECB minion says U.S. chief Fed minion is their idea of an "exemplary" central banker:
• Fed's Powell is an exemplary central banker, ECB's Villeroy says
• Nasdaq, S&P, and Dow finished sharply lower as Trump feuds with Powell
• Wall St ends sharply lower following Trump's anti-Powell tirade

Tuesday, 22 April 2025

• Signs and portents for the U.S. economy:
• Oil prices settle up nearly 2% on new Iran sanctions, equities rally
• US auto industry warns new auto parts tariffs will hike prices, cut sales
• US Treasury Secretary says situation with China is unsustainable, source says
• Chief Fed minion's job appears safe… for now:
• Trump: No plans to fire Fed Chair Powell, but wants lower rates
• Stock futures soar as Trump says 'no intention' of axing Fed Chairman Powell
• Fed minions stay noncommittal on when they'll resume rate cuts, think US poverty levels understated in recent years:
• Fed's Kashkari says 'too soon to judge' interest rate path
• Fed's Harker says US poverty levels may be understated
• BOJ minions act like they will try to keep plan to hike Japan's interest rates alive:
• BOJ likely to keep rate-hike signal intact despite Trump tariff risks, sources say
• ECB minions claim they're close to hitting inflation target and that Eurozone economy was looking good before US tariffs:
• ECB close to hitting inflation target, Kazimir says
• ECB survey sees inflation stabilising at 2%
• Euro zone firms were seeing improved business momentum before tariffs, ECB says
• Nasdaq, S&P, and Dow rallied higher a day after markets observed a large sell-off
• Wall Street ends higher on earnings, hopes of easing tariff tensions
• Gold's record run gains further traction; market conquers $3,500/oz

Wednesday, 23 April 2025

• Signs and portents for the U.S. economy:
• Oil falls 2% after sources say OPEC+ to mull accelerating output
• Exclusive: OPEC+ to consider another accelerated oil output increase for June
• US PMIs Scream Stagflation As Manufacturing 'Contracts', Prices Rise, Heaviest Job Cuts Since GFC
• US new home sales jump in March; supply still rising
• Donald Trump to exempt carmakers from some US tariffs
• Fed minions say they'll hold the Federal Funds Rate where it is for longer, plan to keep keep letting maturing U.S. Treasuries drop off their books:
• Fed's Kugler, citing inflation risks, supports steady policy rate
• Fed's Hammack sees more runway for Fed balance sheet cuts
• Bigger bailouts, trouble, stimulus developing in China:
• China property tycoons become creditors’ labourers
• IMF minions don't think BOJ minions will follow through on plan to hike Japan's interest rates:
• IMF expects BOJ to delay further rate hikes due to tariff uncertainty
• ECB minions think Eurozone inflation will keep falling as Eurozone economy keeps flailing:
• ECB's Knot sees inflation falling faster in near term
• ECB expects wage growth to ease considerably this year
• European business growth stalls in April, PMIs show
• Wall Street ends off session high, but rally extends with Nasdaq up 2.5%, S&P up about 2%

Thursday, 24 April 2025

• Signs and portents for the U.S. economy:
• Oil prices settle up on weaker US dollar, mixed economic news
• Global container shipping volume to fall 1% on Trump trade policies, Drewry says
• Fed minions get mixed picture of economy:
• Price hikes, a rush to buy autos, and uncertainty in wake of Trump tariffs -- Fed report
• Fed's Kashkari nervous that trade policy uncertainty will lead to layoffs
• Bigger trouble, anemic stimulus developing in China:
• Chinese factories slow production and send workers home as US tariffs bite
• Tariff-hit China exporters reluctant to heed government calls to sell locally
• ECB minions getting excited for their next Eurozone interest rate cut, starting to think about moving faster on their next moves:
• ECB policymaker Rehn plays up chance of rate cut in June
• ECB's Rehn says central bank may need to lower interest rates, Bloomberg News reports
• ECB eyeing more nimble policy moves amid price shocks, Bloomberg News reports
• Nasdaq rises nearly 3%, S&P adds 2% as Wall Street posts three-day win streak

Friday, 25 April 2025

• Signs and portents for the U.S. economy:
• Oil posts weekly fall on tariff worry and rising supplies
• US shale patch slows down as oil prices sink
• Trump says China's Xi has called him and that US and China are in trade talks, Time reports
• Fed minions say they'll be patient before doing anything about tariff impact to economy, receive criticism from former minion:
• Fed's Hammack says time for Fed to be patient on policy - CNBC
• Former Fed governor Warsh blasts US central bank for leaving its lane
• Some tariff relief for US goods developing in China:
• China exempts some goods from US tariffs
• Wall Street's four-day rally takes it to a nearly 5% weekly advance
• Back To Where We Started (Almost)
• Is the bottom in? S&P 500 makes quick exit from correction territory
• Wall Street ends with weekly gains as trade negotiations, earnings in focus
• Analysts praise Alphabet after results amaze Wall Street

The raw Atlanta Fed's GDPNow tool's projection of what real GDP growth will be in 2025-Q1 dipped to -2.5% from its -2.2% estimate a week earlier, which is misleading. The GDPNow tool's alternate model forecast, which corrects for an extraordinary surge in gold imports during the quarter that's badly skewing the GDPNow tool's raw projection, declined from an estimate of -0.1% growth to -0.4% growth, meaning the real economy likely shrank by a small percentage during the first quarter.

That's not unexpected as a recession forecasting model based on the level of the Federal Funds Rate and the U.S. Treasury yield curve signaled a recession was likely to start during this period more than a year ago. We should get the BEA's first estimate of GDP during 2025-Q1 this week, while the GDPNow tool will reset its focus to the now-current quarter of 2025-Q2.

Image credit: Microsoft Copilot Designer. Prompt: "An editorial cartoon of a Wall Street bull who is happy because stock prices are rising, with a rising stock chart in the background".

Longtime readers know we occasionally dabble in prime numbers and sometimes also history. That's why this super short Numberphile video leapt out at us in our YouTube feed, because it combines the two.

In the video, Brady Haran tracks down a copy of Marin Mersenne's 1644 book Cogitata Physico-Mathematica at the Royal Society, in which he listed the prime numbers associated with the formula 2ⁿ - 1, which have since become synonymous with his name. But, as Brady quickly identifies, Mersenne made a couple of mistakes in his published list. Here's the video:

If you would like to read Mersenne's book in the original Latin (or would like to read an English translation of it, Luke Welsh has got you covered!

Almost four centuries later, we know of just 52 Mersenne primes. When and where do you suppose they'll discover the next one?

The U.S. new home market may have grown for the first time since July 2024.

The data for March 2024 is preliminary and will be revised several times before being finalized over the next several months. That said, our first estimate of the time-shifted trailing twelve month average of the total value of new homes sold in the U.S. during March 2025 is $27.87 billion. If it holds, it will represent the first month-over-month increase in new home sales since they peaked in July 2024 at a finalized figure of $28.90 billion.

Revisions can be significant. Our initial estimate of the market capitalization of new homes sold in July 2024 was $31.30 billion, which ultimately proved to be overstated by over 7.6%. In the months since we first reported that first estimate, the number of new homes sold reported by the U.S. Census Bureau has been revised substantially lower, accounting for most of the downward change, with much smaller downward revisions in the average new home price accounting for the balance.

The following charts present the U.S. new home market capitalization, the number of new home sales, and their sale prices as measured by their time-shifted, trailing twelve month averages from January 1976 through March 2025.

Falling-to-flat new home sales trend:

Slow downtrend for home prices:

The big question is will this mark the beginning of the end of what has been a downward trend? While it's too early to make that determination at this time, we think the downward trajectory was interrupted by mortgage rates dropping to their lowest levels in months during March 2025, improving their affordability and boosting sales. In recent weeks however, mortgage rates have increased, which suggests the downward trend for new home sales has not yet been broken.

We'll take a closer look at how the relative affordability of new homes for the typical American household changed in March 2025 sometime early next month.

References

U.S. Census Bureau. New Residential Sales Historical Data. Houses Sold. [Excel Spreadsheet]. Accessed 23 April 2025. 

U.S. Census Bureau. New Residential Sales Historical Data. Median and Average Sale Price of Houses Sold. [Excel Spreadsheet]. Accessed 23 April 2025. 

Image Credit: Photo by Jennifer Kalenberg on Unsplash.

The market capitalization of the S&P 500 (Index: SPX) shrank during the first quarter of 2025. Standard and Poor reports the index ended 2025-Q1 with a market cap of $49.41 trillion, a net decrease of $2.45 trillion (or 4.7%) from the $51.86 trillion recorded at the end of 2024-Q4.

Much of that decline was concentrated in the top 10 stocks that make up the market cap-weighted index, which collectively lost $2.78 trillion of their market capitalizations. The bottom 493 stocks that make up the index registered a net gain of $325 billion, which offset a portion of the losses registered by the index' ten biggest component stocks.

In percentage terms, the S&P 500's top 10 stocks went from accounting for 37.3% of the total valuation of the index to 33.6%. Their combined market capitalization is almost $16.58 trillion.

The following chart shows the relative shares of the top 10 stocks in the S&P 500 at the end of the first quarter of 2025.

Here are the approximate market capitalizations of each of the S&P 500's top ten component firms at the end trading on 31 March 2025:

• Apple (NASDAQ: AAPL) $3,463,493,610,544 (7.01%)
• Microsoft (NASDAQ: MSFT) $2,900,243,579,728 (5.87%)
• Nvidia (NASDAQ: NVDA) $2,756,960,677,152 (5.58%)
• Amazon (NASDAQ: AMZN) $1,862,677,733,488 (3.77%)
• Meta Platforms (A) (NASDAQ: META) $1,309,309,282,160 (2.65%)
• Berkshire Hathaway (B) (NYSE: BRK.B) $1,012,861,897,520 (2.05%)
• Alphabet (A) (NASDAQ: GOOGL) $938,750,051,360 (1.90%)
• Broadcom (NASDAQ: AVGO) $815,230,307,760 (1.65%)
• Alphabet (C) (NASDAQ: GOOG) $765,822,410,320 (1.55%)
• Tesla (NASDAQ: TSLA) $751,000,041,088 (1.52%)

All but one of these stocks saw their market caps decline during 2025-Q1. Apple (NASDAQ: AAPL) held onto its position as the most valuable company in the world as measured by its market cap, even though it dropped by 10%.

But there's a new Number 2 in this ranking. Or rather, an old Number 2, because Microsoft reclaimed the title of being the second-largest company in the S&P 500 despite its market cap falling by 10.7%. Meanwhile, former second-largest S&P 500 component Nvidia dropped to become the third-largest company in the index after its market cap dropped over 22% in value.

Amazon and Meta Platforms retained their respective fourth- and fifth-largest rankings within the index, despite market cap declines of 13% and 4% respectively.

Sixth place is now held by Berkshire Hathaway, which is the only one of the Top 10 components of the S&P 500 at the end of 2024 that saw its market cap increase during 2025-Q1. The company displaced Tesla, which saw the biggest percentage drop in its market cap among the top 10 index components, falling by 35% into tenth place.

The remaining three stocks, Alphabet (Class A shares), Broadcom, and Alphabet (Class C shares) clung to their seventh, eighth, and ninth place rankings, even though the Class A shares of Alphabet lost nearly 17% of their market cap, Broadcom lost 26%, and Class C shares of Alphabet lost over 19%.

All these losses took place before President Trump imposed global tariffs, which sent most stock prices plunging after 2 April 2025. Nearly all of the losses that occurred during 2025-Q1 took place after 21 February 2025, when the Chinese company behind the DeepSeek artificial intelligence system announced they would make its code open source the following week. That action effectively popped the AI bubble that had been inflating the value of the S&P 500 and many of its biggest component stocks through the end of the quarter.

The arrival of the global tariff war in April 2025 has since expanded the declines in the S&P 500's market capitalization beyond those stocks whose valuations had inflated with the AI bubble of the preceding two years. We'll see that impact in three months when we take our Summer 2025 snapshot of the S&P 500's market capitalization.

References

Standard and Poor. S&P Market Attributes. [Excel Spreadsheet]. 31 March 2025. Accessed 1 April 2025.

The Global Carbon Project has released its 2024 Carbon Budget, detailing where carbon dioxide originates and goes throughout the entire known carbon cycle on Earth. The report is the among first to project the total year values for carbon dioxide emissions by nation. The following chart presents the amount of CO₂ emissions by the world's largest national producers of the greenhouse gas.

As it has been since 2006, China retains its title as the world's largest emitter of carbon dioxide in 2024 by a widening margin with most nations. That includes India, whose emissions have been rising, but at a slower pace than China's CO₂ output. The United States remains the second-largest national producer at about 41% of China's 2024 emissions, even though its output of carbon dioxide emissions has been falling since 2005.

Changing to look at monthly data of how fast carbon dioxide emissions accumulate in the Earth's atmosphere, the trailing twelve month average of the year-over-year change in atmospheric CO₂ levels peaked in January 2025. Since then, the rate of CO&8322; accumululation in the Earth's air has fallen off sharply from January 2025's record high pace.

This data is telling us something important about the state of Earth's economy. Since China is such an outsize contributor to the carbon dioxide that is emitted into the atmosphere, it indicates that China's economy has dramatically slowed since the end of 2024. And that happened before the U.S. imposed much higher tariffs on China's exports to the U.S. on 2 April 2025, which have slowed China's economy further.

In previous slowdowns, China's government has responded by stimulating the country's economy, resulting in higher CO₂ emissions to counter the slowing. Will 2025 be different?

References

National Oceanographic and Atmospheric Administration. Earth System Research Laboratory. Mauna Loa Observatory CO2 Data. [Online Data]. Updated 14 April 2025. Note: The NOAA appears to have changed its schedule for releasing atmospheric CO₂ concentration data from the Mauna Loa Observatory. Previously, they had regularly reported their revised and latest data during the first week of the month, but since March 2025, have been posting it in the middle of the month.

Image Credit: Friedlingstein, Pierre et al. Global Carbon Budget 2024. GtCO2 slidedeck PDF. 14 March 2025.