It was a mixed week across the financial markets as investors processed fresh economic data, rising interest rates, and ongoing tariff tensions between the U.S. and China.
The S&P 500 ended the week slightly higher, closing around 5,650, with the Dow Jones Industrial Average also posting modest gains. However, the Nasdaq slipped as technology stocks gave back some recent momentum. Overseas, global markets followed a similar path, with European and Asian indices seeing moderate improvements. Sentiment remained cautious, but not pessimistic.
In the bond market, U.S. Treasury yields moved higher once again. The benchmark 10-year yield climbed to 4.36%, signaling growing concern among investors about inflation and the strength of future economic growth. Rising yields typically mean falling bond prices, but they also reflect expectations that the Federal Reserve may stay firm on its current monetary stance.
Commodities saw a bit of a pullback. Gold edged down slightly to just over $3,330 per ounce, though it remains near record highs as investors continue to favor it during uncertain times. Oil prices, on the other hand, continued their downward trend. West Texas Intermediate crude fell to around $57 per barrel, weighed down by concerns over global demand and abundant supply.
Currency markets showed some movement as well. The U.S. dollar weakened against the euro, suggesting reduced demand for dollar-denominated assets. Meanwhile, the yen lost ground as investors shifted out of traditional safe-haven currencies during the stock market rebound. The Chinese yuan held relatively steady, supported by efforts from Beijing to stabilize markets.
Economic data added to the mixed picture. The U.S. economy shrank by 0.3% in the first quarter, marking its first contraction since 2022. April’s jobs report showed 62,000 new positions added, with the unemployment rate holding at 4.2%—steady but not especially strong. Inflation remains a concern as the Fed’s preferred gauge, core PCE, rose 0.3% for the month and is up 2.6% over the past year. Together, these numbers suggest the economy is cooling, but not yet reversing in a major way.
Finally, tariff tensions continued to dominate headlines. The U.S. held firm on its 145% tariff rate on Chinese goods, a policy that is now causing ripple effects in both countries. China signaled it’s open to renewed trade talks—but only if the U.S. agrees to roll back the steepest tariffs. Meanwhile, protests have erupted across Chinese manufacturing hubs as factory shutdowns and missed wages take a toll. The broader economic impact of these policies is becoming more visible, adding another layer of uncertainty for investors.
Investor Takeaway
This past week was a reminder that markets can climb even as warning signs start to flash. Slowing growth, sticky inflation, and trade uncertainty are all on the radar. While investors saw modest gains, many are watching closely for signs of progress on tariffs and more clarity on the health of the economy.
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