Weekly Market Commentary

US equity markets continued to impress with another set of weekly gains. The mega-cap issues retook the lead, while small-cap issues lagged. Global central bank policy was top of mind for investors who received a full dose of economic data. The US Federal Reserve unanimously decided to hold its monetary policy rate at 5%-5.25% but indicated in its Summary of Economic Projections that the terminal rate is expected to top out at 5.6%. Chairman J. Powell was also relatively hawkish in his post-announcement Q&A, saying July is a live meeting. The European Central Bank raised its policy rate by 25 basis points, indicating that more rate hikes were probable. The Bank of Japan left its policy rate unchanged at -0.1%, while the Bank of England also decided to keep its rate intact. The Peoples Bank of China (PBOC) lowered its 1-year medium-term rate by ten basis points as China continues to stimulate its economy.

Economic data in the US showed continued moderation in prices. The Consumer Price Index came in line with expectations of an increase of 0.1%, while the core reading that excludes food and energy also came at 0.4%. On a year-over-year basis, the headline number came in at 4%, down from 4.9% in April. The core reading fell to 5% from 5.5% in April. Similarly, Producer Prices also fell in May. Headline PPI fell by 0.3% more than the consensus estimate of 0%. The Core reading increased by 0.2%, slightly above the expected increase of 01%. Both figures fell on a year-over-year basis from the prior month’s reading. While Core CPI on a year-over-year basis remains elevated, the street cheered the fact that prices continue to move in the right direction. The shelter component of the CPI continues to be elevated at 8% and makes up 60% of the CPI’s advance. Retail Sales increased by 0.3% in May, slightly more than the consensus estimate of 0.2%. Ex-Auto’s retail sales increased by 0.1% less than the 0.3% expected. Initial Claims came in north of 260K for the third week in a row, while Continuing Claims increased to 1775k from 1755k in the prior week.

The S&P 500 inked a gain of 2.6% on the week and traded north of 4400. Goldman Sachs increased its year-end price target on the S&P 500 from 4000 to 4500. The Dow rose by 1.2%; the NASDAQ outperformed with a 3.2% gain from strong Information Technology Mega Caps and a strong showing from Semiconductors. The Russell 2000 lagged but added 0.5%.

US Treasuries continued to sell off, with yields moving higher across the curve. The 2-year yield increased by nine basis points to 4.71%, while the 10-year yield increased by two basis points to 3.77%. Oil prices rose by $1.62 to $71.92, but the energy sector lost ground on the week despite the move. Gold prices fell by $5.8 to close at $1971.30 an oz. Copper prices rebounded with a $0.11 gain to close at $3.89 an Lb. This week, the US Dollar index lost ground on significant weakness to the Euro and British Pound.

Investment advisory services offered through Foundations Investment Advisors, LLC (“FIA”), an SEC registered investment adviser. FIA’s Darren Leavitt authors this commentary which may include information and statistical data obtained from and/or prepared by third party sources that FIA deems reliable but in no way does FIA guarantee the accuracy or completeness.  All such third party information and statistical data contained herein is subject to change without notice.  Nothing herein constitutes legal, tax or investment advice or any recommendation that any security, portfolio of securities, or investment strategy is suitable for any specific person.  Personal investment advice can only be rendered after the engagement of FIA for services, execution of required documentation, including receipt of required disclosures.  All investments involve risk and past performance is no guarantee of future results. For registration information on FIA, please go to https://adviserinfo.sec.gov/ and search by our firm name or by our CRD #175083. Advisory services are only offered to clients or prospective clients where FIA and its representatives are properly licensed or exempted.

Share:

View the Latest Commentaries:

Weekly Market Commentary

It was a volatile week on Wall Street as traders assessed monetary policy decisions from several central banks, including the Federal Reserve.  The Fed did, as expected, raise its policy rate by 25 basis points to 3.75%-4.00%, but Fed Chairman Warsh’s very hawkish tone increased the likelihood of three more rate hikes starting later this year and in the first half of 2027.  The Fed Chair offered no forward guidance but did provide the dot plot from the other committee members.  The yield curve flattened on the announcement, with the front end of the curve selling off more than longer-duration Treasuries. Notably, the Bank of England kept its policy rate in place while the Bank of Japan raised its policy rate by 25 basis points.  A more dovish signal from the BOJ’s president sent the Yen lower.  Bottom line: the US economy is strong, employment looks stable, and inflation remains

Weekly Market Commentary

US equity markets fell in the holiday-shortened week as oil prices surpassed $100 a barrel, raising inflation concerns and pushing interest rates higher.  Additionally, elevated inflation data announced during the week increased the likelihood that the Federal Reserve would raise its policy rate by 25 basis points.  Several Gulf nations announced Friday that they would meet with Iranian officials this weekend to ease tensions, and on Sunday Tehran announced it would decide whether to open part of the Strait of Hormuz, but details of the opening were limited.  This followed Saudi Arabia’s announcement that it had shut down the oil pipeline used to circumvent the Strait. The S&P 500 fell 0.78%, the Dow gave back 1.56%, the NASDAQ declined 0.64%, and the Russell 2000 decreased by 2.39%.  US Treasuries suffered losses across the curve, with the front end of the curve getting hit hardest.  The 2-year yield increased by twenty-six

Weekly Market Commentary

Markets finished the week mixed as investors assessed the escalation of tensions between the US and Iran and recalibrated expectations of Federal Reserve monetary policy.  The week started with sharp declines after the US hit targets on an island in the Strait of Hormuz that were ready to launch mines into the strait.  Iran then countered with drone attacks on Jordan and the UAE.  On Saturday, there were reports that the US had hit three Iranian cargo ships after Iran fired ballistic missiles at two US Navy ships.  The news sent oil prices higher, which in turn raised inflation concerns.   Markets settled down mid-week after Dell reported a solid quarter and after dovish comments made by Fed Bank of New York President John Williams.  Markets moved higher on Thursday after Fed Governor Waller said he would be willing to hold rates steady if price pressures continue to ease and noted

Weekly Market Commentary

Markets ended the week mixed as investors assessed the implications of the US economic isolation of Iran, the fallout of increased tariffs on Canada, Nvidia Q2 earnings results, and the Fed Chairman’s speech at the Kansas City Federal Reserve’s Economic Symposium in Jackson Hole. Oh yeah, we were also treated to a slightly hotter print of the Fed’s preferred inflation measure, the PCE. On Monday, Treasury Secretary Bessent laid out a plan to isolate economic activity with Iran.  The plan, dubbed Economic D-day, promised economic punishment to any country doing business with Iran and suggested that, in the coming days, there will be announcements and actions taken against several entities that have worked alongside Iran to evade economic sanctions.  The US and Iran both said they would not return to the MOU signed in June, as negotiations have stalled.  Oil traded lower this week on reports that 10 million barrels