Tariff Uncertainty Expanded
The news just keeps on coming! Last week Tariff Uncertainty increased, with doubts regarding China progress, the increased tariff on EU steel and of course, the entire Tariff situation sitting in our court system.
You probably have read, if the courts rule against the tariffs, there are other alternatives the administration will pursue.
To me, this pushes back the light at the end of the tunnel and provides China, the EU, and other countries more time to posture.
The Fed: Will They Cut Interest Rates?
Last week, as reported by the Wall Street Journal, headline inflation decelerated to 2.1% annually. Core inflation was reported at 2.5%. Inflation, according to these numbers, appears to be under control.
If you are the Fed, do you look to cut rates or wait? For one of the few times since Powell has chaired the Fed, I agree: sit back, and wait.
The economic data continues to be fine for the time being. Along with tariff uncertainty and tax-bill uncertainty, the CEO’s not providing forward guidance is a good reason for the Fed to wait, for now!
This Tuesday, we will hear the JOLTS Jobs report suggesting the number of available jobs. On Wednesday, the ADP employment change report for May. Thursday the Challenger Jobs Cuts report and on Friday, the jobs report that most investors follow, the Nonfarm, Private, and manufacturing payrolls report for May.
US Stock Market Flattish for 2025
US stocks continue to flirt with the year-to-date breakeven line. As of last Friday, for 2025, the Dow is off (1.14%), the S&P 500 (.19%), the Nasdaq (1.91%) and the Russell 2000 (7.65%).*
4 of the 11 sectors that make up the S&P 500 are in the red for the year. Information technology is down (2.86%), Healthcare (4.04%), Energy (5.83%) and Consumer Discretionary (6.68%).
Foreign stocks are up a handsome 17.01% and emerging market stocks are up, at 8.51%.
Bond yields continue to stay range bound with the 10-year US Treasury ending last Friday with a yield of 4.398%.
*The Russell 2000 Index is generally representative of the 2,000 smallest companies by market capitalization in the Russell 3000 index, which represents approximately 10% of the total market capitalization of the Russell 3000 Index. Indexes are unmanaged and cannot be invested in directly.
*The S&P 500 is a stock market index tracking the stock performance of 500 of the largest companies listed on stock exchanges in the United States. Indexes are unmanaged and cannot be invested in directly. (102-LPL).
*The NASDAQ Composite Index measures all NASDAQ domestic and non-U.S. based common stocks listed on The NASDAQ Stock Market. The market value, the last sale price multiplied by total shares outstanding, is calculated throughout the trading day, and is related to the total value of the Index. Indexes are unmanaged and cannot be invested in directly. (112-LPL).
Where Do the Markets Go From Here?
What makes this challenging: between the time I am writing this blog, Sunday 6/1/25 @ 10:48am and the time of publishing, so much can change.
As long as the uncertainty level continues, expectation should be for continued market volatility, in both directions.
Clarity on both tax policy and tariffs is desired. Let’s hope sooner than later!
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All data sourced from Wall Street Journal, May 30, 2025.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested directly. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets. Value investments can perform differently from the market as a whole. They can remain undervalued by the market for long periods of time.
