The Week in Review 06/02/25

“Every strike brings me closer to the next home run.” – Babe Ruth

Good Morning,

It was a short week of trading with the Memorial Day holiday last Monday, and the market started the week with a bang after President Trump announced a deferral of the 50% tariff rate for the EU until July 9 to allow more time to negotiate a trade deal.

The S&P 500 surged 2.1% on Tuesday but ended the week up 1.9%.

Last week's gains were logged on Tuesday… the rest of the week was marked with sideways and choppy action as participants digested a few other key developments; while contending with the notion that the market is sporting a premium valuation and is due for a period of consolidation.

NVIDIA's better-than-expected earnings report and outlook after Wednesday's close was one of the other key developments, along with a series of well-received 2-yr, 5-yr, and 7-yr note Treasury auctions, improved consumer confidence, and some confusing action on the tariff/trade front.

Tariff uncertainty continues to drive the market volatility.

Late Wednesday, the U.S. Court of International Trade ruled that the president did not have the legal authority to enforce reciprocal tariffs.

On Thursday, the U.S. Court of Appeals granted the White House's request to temporarily reinstate the tariffs.

On Friday, President Trump said China had violated the preliminary trade agreement worked out in Switzerland and noted "So much for being MR. NICE GUY!" before adding later that day that he hopes to be able to work things out with President Xi.

Last week culminated with a 1.9% gain for the S&P 500, a 0.3% gain for the U.S. Dollar Index, and an eight basis-point decline in the 10-yr note yield to 4.42%.

May was the best month for the S&P 500 (+6.2%) and Nasdaq Composite (+9.6%) since 2023.

What seems to be missing from the narrative lately is how nice the inflation numbers are coming in… PCE Price Index, the Fed’s favorite inflation metric came in at 2.01% YoY!

Isn’t the Fed’s target 2%?

Crickets…

Many retailers have lowered their forward earnings guidance due to the uncertainty of tariffs. Lululemon reports this Thursday and many will interpret that in regard to consumer spending.

Have a wonderful week!!

Michael D. Hilger, CEP^®
Managing Director
Senior Vice President, Wealth Management

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