Weekly Market Recap: U.S. Equities, Fed Insights, and Economic Highlights

Market Overview

U.S. stocks rose for the sixth week out of seven[RR1] , driven by NVIDIA's (NVDA) announcement of a new chip and a 10-for-1 stock split, which propelled the S&P 500 about 1.5% higher for the week. The Nasdaq and the Russell 1000 Growth Index outperformed, while small caps lagged with the Russell 2000 Index falling about 3%. Technology leadership was bolstered by strong earnings from Hewlett Packard Enterprise (HPE) and gains in communication services stocks like Alphabet (GOOG/L) and Meta (META). Conversely, energy and utilities were the biggest laggards due to lower oil prices and a rate increase affecting utilities. Internationally, European markets gained nearly 1% following expected rate cuts from the ECB and the Bank of Canada. Political developments in India and Mexico also influenced market performance, with India's market showing resilience and Mexico's market declining sharply.

Federal Reserve Insights and Economic Roundup

Despite a sell-off on Friday due to a strong jobs report, the Bloomberg Aggregate Bond Index finished higher. Intermediate to longer-maturity Treasury yields were lower by 0.07% to 0.10% for the week. The labor market remained strong, with May payrolls growing by 272,000, well above expectations. The unemployment rate rose slightly to 4%, and average hourly earnings increased by 4.1% year-over-year. The ISM Services report for May showed mixed results, with stable growth in restaurants and hotels but rising costs in construction. Job market turnover stabilized, with the openings-to-unemployed ratio matching pre-pandemic levels, suggesting easing wage pressures.

The Week Ahead

Upcoming economic data includes:

Monday: New York Fed 1-year Inflation Expectations (May)

Tuesday: NFIB Small Business Optimism (May)

Wednesday: MBA Mortgage Applications (June 7), CPI (May), CPI Ex food and energy (May), Real Avg Earnings (May), FOMC rate decision (June 12), Interest on Reserves Balances Rate (June 13), Monthly Budget Statement (May)

Thursday: Initial Jobless Claims (June 8), Continuing Claims (June 1), PPI (May final), PPI ex food and energy (May), PPI ex food, energy, and trade (May)

Friday: Import Price Index (May), Import Price Index ex petroleum (May), University of Michigan Sentiment (June)