Market Summary – June 3, 2024

Last Week’s Summary

  • S&P 500 Index fell 0.49%
  • International Equities fell 0.89%
  • Emerging Markets fell 3.09%
  • U.S. 10-Year Treasury Yield rose to 4.49%
  • Core PCE fell to 3.6%
  • PCE Core Deflator fell to 2.7%
  • GDP fell to 1.3%
  • Initial Jobless Claims rose to 219k

What to Watch for This Week

  • M, 6/3/24 ISM Manufacturing
  • T, 6/4/24 Factory Orders, Durable Goods Orders
  • W, 6/5/24 MBA Mortgage Applications, ADP Employment Change
  • Th, 6/6/24 Initial Jobless Claims
  • F, 6/7/24 Change in Nonfarm Payrolls, Unemployment Rate

Weekly Market Recap

In May, U.S. stocks experienced renewed volatility, particularly in the final days of the month. This period saw a notable rotation between technology and other industry sectors. Despite an early session decline, the S&P 500 rallied almost 1% on Friday, marking its best month since February.

The Index had dipped significantly earlier in the day due to a downturn in mega-cap stocks. Meanwhile, U.S. Treasuries saw extended gains, culminating in their strongest month in 2024. This bond market performance was bolstered by the latest core Personal Consumption Expenditures (PCE) price data, which matched estimates and showed the smallest increase of the year.

Additionally, consumer spending unexpectedly dropped. The core PCE price index, which excludes food and energy, rose by 0.2% from the previous month. This figure is significant because it is closely watched by the Federal Reserve as an indicator of underlying inflation trends.

The data suggested that inflation pressures might be easing slightly, which traders interpreted as mildly positive or “marginally dovish” for the Fed’s future policy decisions. Looking ahead, the release of new jobs data next week is anticipated to provide further clarity on the economic outlook and the Federal Reserve’s potential actions. This data will be crucial for market participants trying to gauge the Fed’s next move and its timing.

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