Weekly Market Recap: June Momentum Builds as Labor Market Steadies and Rate Hopes Stay Alive

Market Overview

Equities rallied into June, with the S&P 500 advancing 1.54% and the Nasdaq leading major averages, gaining 2.20%. Investors digested strong labor data, with May’s nonfarm payrolls up 139,000—cooler but steady enough to quell fears of a sharp slowdown. Meanwhile, an unexpected uptick in job openings and a rebound in construction hiring painted a picture of gradual normalization rather than deterioration.

Trade remained in focus, but with muted market reaction. President Trump’s tariff hikes on steel and aluminum to 50% and high-level talks between U.S. and China offered more noise than action. Overseas, European and Asian markets posted modest gains, buoyed by tax reform in Germany, a South Korean election resolution, and a rate cut in India. The ECB followed through with its expected policy easing, giving European equities a midweek lift.

The strongest performing sectors were Communication Services (+3.2%), Technology (+3.0%), and Energy (+2.2%), while defensive plays like Consumer Staples (-1.5%) and Utilities (-1.0%) lagged.

Federal Reserve Insights & Economic Roundup

Despite growing political noise and evolving trade rhetoric, the Fed appears locked into “wait and see” mode. Treasury yields rose over the week as Friday’s jobs report cooled rate-cut bets—especially after earlier weakness in ADP payrolls and ISM services had markets pricing in a more dovish path.

Wages climbed 0.4% month-over-month, outpacing inflation and giving workers a real income boost. Quit rates fell, suggesting fewer people feel confident about job-hopping, while the labor force participation rate dipped—largely due to lower engagement among older workers.

Bottom line: The labor market is decelerating, not collapsing. That supports a Fed on pause—potentially cutting later in the year if inflation cooperates and growth stays stable.

The Week Ahead

Markets will be watching inflation data closely, with both CPI and PPI due midweek. Other key readings include:

Monday: Wholesale Inventories and Inflation Expectation
Tuesday: NFIB Small Business Optimism
Wednesday: May CPI and Real Earnings
Thursday: PPI, Jobless Claims, Household Net Worth
Friday: University of Michigan Sentiment Index

With inflation and sentiment in focus, expect increased volatility—especially if data surprises to the upside and rekindles rate hike concerns.