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Anna's Markets Recap

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Saturday, 5:45 AM

May 31, 2025

Good morning news friend! Here is a quick recap of what happened in the markets this week. 📰🌟

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What Moved Markets Last Week

U.S. stock markets climbed higher during the holiday-shortened week of May 26-30, 2025. The S&P 500 gained 1.88%, and the Nasdaq Composite rose 2.01%, with large-cap stocks leading the way.

Investors had a lot to digest, with new numbers on inflation, economic growth, consumer confidence, and the job market.

Trade tariff talk also kept things interesting, with some tariff delays and legal challenges popping up.

Company earnings, especially from tech, swayed individual stocks and sector trends. And, as always, everyone kept a close eye on the Federal Reserve for hints about future interest rates.

We saw a revised Q1 GDP that actually shrank a bit and jobless claims ticking up. So, what kept things afloat? A few things. Tech sector optimism, especially around Artificial Intelligence (AI), was a big one. Plus, good news like a jump in consumer confidence and cooling PCE inflation helped.

Investors might be thinking these positive signs make Fed rate cuts more likely down the road. It also seems there's a feeling that the worst-case tariff scenarios might be avoided or won't hit too hard. Overall, the good news seemed to outweigh the bad for the week.

Let's look at the key economic numbers that shaped the market:

Gross Domestic Product (GDP): The second look at Q1 2025 GDP showed a 0.2% annual dip. This was actually better than the first estimate. The main reason for the drop? A big jump in imports as businesses stocked up before expected tariffs. Consumer spending also slowed. But, a core measure of economic strength, final sales to private domestic purchasers, rose 2.5%, which is a good sign. The market seemed to look past the headline GDP drop, seeing it more as a trade policy quirk than a sign of a deep recession. The Atlanta Fed’s GDPNow forecast for Q2 2025 even jumped to +3.8% as of May 30.

Inflation (PCE): The April Personal Consumption Expenditures (PCE) Price Index, which the Fed watches closely, cooled off. Headline PCE rose 2.1% year-over-year, down from 2.3% in March. Core PCE (stripping out food and energy) was up 2.5% year-over-year, down from 2.7% and the lowest in over four years. Month-over-month, both headline and core PCE rose just 0.1%. This is good news, and generally makes people optimistic about future rate cuts. Still, some economists worry tariffs could push inflation back up later in the year.

Consumer Confidence: The Conference Board Consumer Confidence Index® shot up 12.3 points in May to 98.0. That’s the biggest monthly jump in over four years and the first rise since November. People across all age and income groups felt better about future income, business conditions, and the job market. Their outlook on stocks improved too. Even though inflation is still a concern, worries about future inflation eased a bit. Strong consumer confidence can point to healthy future spending.

Labor Market: Initial jobless claims rose by 14,000 to 240,000 for the week ending May 24, which was more than expected. Continuing claims also went up. A jump in applications in Michigan, a big auto industry state, played a part. This hints that layoffs might be picking up as tariffs create uncertainty.

Treasury Yields: Yields on 10-year U.S. Treasury notes dropped to 4.41% from 4.51%, and 2-year yields fell to 3.89% from 4.00%. This was partly due to the trade policy ups and downs and uncertainty about what the Fed will do next.

WTI Crude Oil: Prices dipped slightly, around 0.03% for the week, to $60.90 per barrel. Oil prices were feeling pressure from upcoming OPEC+ supply decisions and worries about global demand, partly linked to trade tensions.

Federal Reserve: Fed Chair Powell met with the President on May 29 and repeated that future policy will depend on incoming economic data, based on careful, objective analysis. San Francisco Fed President Mary Daly said on Thursday that policymakers could still cut rates twice this year if inflation keeps heading towards the 2% goal.

Tech and Growth Stocks

The tech sector gained 1.98% this week. AI excitement, company earnings, and U.S.-China trade talks were the main topics.

Nvidia (NVDA): Reported strong Q1 earnings on Wednesday, May 28, beating expectations with revenue of $44.1 billion. The stock initially jumped but then fell 2.9% on Friday, May 30, erasing those gains. The drop was linked to news of President Trump signaling more trade tensions with China. Nvidia took a $4.5 billion charge for excess inventory due to U.S. export restrictions to China and guided for an $8 billion revenue loss in Q2 because of these controls. This shows how sensitive the AI chip sector is to trade policy.

Apple (AAPL): Stock rose about 2.86% for the week, closing at $200.85 on May 30. Worries about potential U.S. tariffs on iPhones made outside the U.S. were a drag. But, excitement for Apple's Worldwide Developers Conference (WWDC) in June, with expected AI updates, helped balance things out.

Salesforce (CRM): Reported Q1 earnings on May 28, beating expectations with revenue of $9.8 billion. The stock rose 1.26% in aftermarket trading. Salesforce also raised its full-year revenue guidance, thanks to strong growth in its Data Cloud and AI offerings.

Microsoft (MSFT): Stock was fairly flat, closing at $458.68 on May 29. The market was still processing news from its recent Build 2025 event, which focused heavily on AI.

Amazon (AMZN): Announced plans on May 29-30 to spend over $100 billion on capital expenditures in 2025, likely for cloud services (AWS), logistics, and AI. The stock saw a small gain.

Meta (META): Declared a quarterly cash dividend of $0.525 per share on May 29.

Alphabet (GOOGL): Stock was down slightly, closing at $172.96 on May 29. The market was still thinking about AI integrations in Search announced at Google I/O.

Netflix (NFLX): Stock rose about 1.84% for the week. News from its Upfront presentation about its ad-supported plan (now over 94 million users) and its new in-house ad platform was a focus. However, JPMorgan downgraded the stock.

Broadcom (AVGO): Stock was up, closing at $241.97 on May 29, ahead of its June 5 earnings. Strong demand for its networking products and custom AI chips fueled optimism.

Banks and Financials

The financial sector watched interest rates and regulatory talk.

JPMorgan Chase (JPM): Stock was slightly down for the week. On May 27, the bank announced it's expanding its services for wealthy clients by opening 14 new J.P. Morgan Financial Centers.

Mastercard (MA): Stock rose 1.1% on May 28. Goldman Sachs reiterated a Buy rating, citing Mastercard's strong position in digital payments.

Visa (V): On May 27, Jefferies kept a Buy rating on Visa and raised its price target to $410.

Bank of America (BAC): Stock was around $39.50 on May 29. Social media sentiment was a bit cautious this week.

Berkshire Hathaway (BRK.B): Discussion continued about Warren Buffett stepping down as CEO at the end of 2025.

Consumer Goods and Healthcare

Consumer staples showed their usual strength.

Costco (COST): Reported strong Q3 earnings on Thursday, May 29, beating estimates. Revenue was $63.21 billion, up 8.0% year-over-year. The stock jumped significantly on Friday, May 30, hitting $1,045.30.

Procter & Gamble (PG): Stock gained about 1.26% for the week, closing at $169.89 on May 30. Its defensive appeal helped in the volatile market.

AbbVie (ABBV): Stock closed at $186.11 on May 30, up for the week. Positive momentum came partly from the recent FDA approval of Emrelis for a type of lung cancer.

Eli Lilly (LLY): Stock was slightly down, closing at $722.57 on May 29. The company was set to present data on investigational drugs at an oncology meeting on May 30.

Johnson & Johnson (JNJ): The ex-dividend date for its quarterly dividend of $1.30 per share was May 27.

Walmart (WMT): Stock was up 1.29% on May 29, closing at $97.58, showing stable performance.

UnitedHealth Group (UNH): Stock saw a small increase, closing at $298.17 on May 29, but has been down significantly year-to-date.

Energy and Industrials

The energy sector was the worst performer this week, down 0.34%, as oil prices fell.

Exxon Mobil (XOM): Stock was trading around $101.96 on May 30. News came out on May 28 that ExxonMobil agreed to exit a majority stake in Esso Thailand. Falling oil prices likely weighed on the stock.

Home Depot (HD): Stock gained 1.54% from May 27 to May 30. The company had declared a dividend the prior week, which was still relevant for income investors.

Commodities

Gold: Prices fell 2.03% for the week, closing around $3,289.40 per ounce. A slightly stronger U.S. dollar was the main reason. Investors also reacted to the U.S. PCE inflation report.

Did you know we also write in-depth deep dives? They are long, packed with insights, and have received rave reviews. If you’re up for a detailed, action-packed read, check them out:

• Ethanol: Hype, Hope or the future of Fuel?

• AI Chip Cold War

• Consumer Spending Trends

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Baked with love,

Anna Eisenberg ❤️