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U.S. Equity Markets End Week Higher, Capping a Strong May
Equity markets finished the holiday-shortened week in positive territory, buoyed by encouraging developments in U.S.–E.U. trade talks. Additionally, the University of Michigan’s Index of Consumer Sentiment came in at 52.2, above the earlier preliminary reading of 50.8. Global equities, as measured by the MSCI All Country World Index, gained 1.35% for the week and ended May up 5.61%. U.S. equities also performed well, with the S&P 500 Index rising over 1.9% for the week and finishing the month up 5.63%. Overall, the week capped off a strong May for both domestic and international equity markets.
Treasury Yields Fall
After noting last week that Treasury yields had risen to their highest levels since 2023, we’ve since seen a reversal. The yield on the 30-year U.S. Treasury bond fell back below the 5.00% threshold, ending the week around 4.91%, down from a recent peak of 5.09% on May 21. Yields on shorter-dated Treasuries also declined, with the 10-year yield finishing at 4.39%.
PCE Inflation
One key measure of inflation remained above the Federal Reserve’s 2.0% target in April but showed a modest decline from the prior month, easing some concerns about upward pressure from higher tariffs. The Personal Consumption Expenditures (PCE) Price Index, released Friday, showed that core inflation (which excludes food and energy) rose at an annual rate of 2.5%, down from 2.7% in March.
Looking Ahead
It’s the first Friday of the month, which means the latest batch of U.S. jobs data is on deck. The monthly labor market report will reveal whether the recent trend of moderate but better-than-expected job growth continued into May. In April, the economy added 177,000 jobs, surpassing consensus expectations of around 130,000. March’s figure was also revised higher, with an adjusted gain of 185,000 jobs.
As Always
I’d like to leave you with the final line we’ve used since we started these commentaries back at the very height of market volatility in March 2020. Always remember that we create financial/investment plans not for the easy times, but to prepare for the tough ones.
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