Weekly Market Update for May 30, 2025
Markets crept higher during the holiday-shortened week. The gains came almost entirely on Tuesday when a 50% tariff on the EU set for June 1 was pushed back to July 9. On Wednesday morning, a US federal court ruled against a large swath of April’s reciprocal tariffs only to have an appeals court issue a temporary stay by the afternoon, allowing tariffs to remain in force – thus the trade undulations continue.
The S&P 500 finished the week up +1.9%, while the Nasdaq rose +2.0%. For the month of May, these two equity indices rose +6% and +9%, respectively. The 10-Year Treasury yield, an interest rate indicator, closed at 4.40%, down -11 bps from last week. The 6-Month US Treasury, a favorite of our US Treasury strategy, was essentially unchanged at 4.31%. Federal auctions of 2yr, 5yr, and 7yr Treasury bonds saw strong demand this week, including from international investors, easing some concerns of weakening foreign appetite.
May’s reading of consumer confidence (source: Conference Board) rebounded sharply following the period of trade de-escalation between the US and China, stemming five months of decline. Q1 GDP was revised higher on Thursday, now suggesting the economy expanded at a 2.1% annualized rate (from 2.0% initially). Also Thursday, weekly jobless claims indicated a slight weakening in the labor market. And on Friday, April PCE inflation was cooler than expected. On the whole, the economic data was positive.
Tech bellwether Nvidia’s quarterly report led the sector higher on Thursday. Results were strong and forward guidance was better than feared. Revenue grew by 69% versus a year ago (12% q/q), while adjusted earnings grew by 33%. This was despite an estimated $2.5bn in lost sales due to being prohibited from selling its H20 chip into China. Next quarter management expects revenue to grow 50% y/y despite an $8bn H20 headwind. This level of growth is remarkable for a company that is virtually tied with Microsoft for the largest market capitalization in the world. The company is seeing robust demand for its Blackwell line, and accelerating data center buildouts amongst sovereign and enterprise customers.
Looking ahead to next week, cyber-security firm CrowdStrike reports quarterly results on Tuesday and chip-maker Broadcom on Thursday. We will get readings of manufacturing activity on Monday, job openings (JOLTS) for April on Tuesday, and the big employment report for May on Friday. For those of you in Minnesota, we hope you can get outside and enjoy these 80-degree days in the forecast this weekend!
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