Weekly Commentary (06/09/25) – Markets Finish Higher on the Week

For the week, the DJIA gained 1.23% while the S&P 500 closed near record highs and added 1.54%.  The tech-heavy Nasdaq finished ahead by 2.20%. For the week, the MSCI EAFE Index tacked-on 0.73% while emerging market equities (MSCI EM) finished up 2.29%.  Small company stocks, represented by the Russell 2000, jumped 3.23% as small-cap stocks are trying to play catch-up.  Fixed income, represented by the Bloomberg/Barclays Aggregate, finished lower 0.44% for the week as yields moved higher.  As a result, the 10 YR US Treasury closed at a yield of 4.51% (up 10bps from the previous week’s closing yield of ~4.41%) as investors position for potentially higher short-term inflation due to tariffs. Gold prices closed at $3,322.70/oz – up 1.03%.  Oil prices moved materially higher by 6.23% to close at $64.58 per barrel.  
                   
Economic news released last week confirmed a resilient labor market and economic backdrop.  The May Employment Report was better-than-expected for both job creation and wage gains.  Nonfarm payrolls grew 139,000 against an expected gain of 125,000, but the previous two months were revised materially lower.  Average hourly earnings grew 0.4% versus an expected advance of 0.3%.  The unemployment rate remained steady at 4.2%.  The strong report has market participants not expecting a rate cut this month and odds of a rate cut in in September now at 50.7%.  The Atlanta Fed GDPNow model has 2Q’25 GDP at 3.8% … pretty decent growth.
 
The big news in the week ahead centers on the release of the CPI, PPI, and Consumer Sentiment.   The CPI and PPI reports will give investors and the Fed a clue as to inflation’s direction. 
 
Market activity is broadening out a bit … a good sign. Remember, market valuations reflect a lot of good news.  Perhaps the economy will hit a soft patch over the next few months, but underlying economic activity remains reasonable.  Diversification, patience and a bias towards quality will help investors manage through the usually slow summer period. 
 
Enjoy the week.
 
“Life is a long lesson in humility.” – James M. Barrie