Market Data as of Week Ending: 6/6/2025 unless noted otherwise
Equities moved higher last week as investors grew more confident, despite ongoing tariff concerns. Small and mid-caps outperformed large caps during the week but continue to trail year-to-date. Growth stocks outperformed during the week, though they still lag value for the year. Technology and communication services led the S&P 500, while defensive sectors underperformed. Overseas equities were broadly higher, with European gains offsetting losses in Japan. Emerging markets rose as weaker-than-expected Chinese data fueled hopes for further stimulus.
Fixed income declined as yields climbed following Friday’s stronger-than-expected jobs report. The 2-year Treasury yield rose 15 basis points to 4.04%, while the 10-year yield rose 10 basis points to 4.51%, flattening the 2s/10s spread to 0.47%. Government bonds underperformed corporates and high-yield as credit spreads tightened. Investment-grade and high-yield yields closed the week at 5.29% and 7.68%, respectively.
Economic data this week was primarily focused on labor. The job market remains resilient but continues to show signs of slowing. Non-farm payrolls rose by 139K in May, beating expectations, while the unemployment rate held steady at 4.2%. Revisions to March and April payroll figures lowered the prior estimates by a combined 95K. Job openings increased more than expected by 191K, but the quits rate fell to 2.0%, indicating reduced worker confidence. ADP reported that private employers added just 37K jobs in May, the lowest level since March 2023. Initial jobless claims rose to 247K, the highest level since 2024. On the business side, ISM reported that manufacturing PMI contracted for the third consecutive month, falling to 48.5%. ISM Services PMI also slipped into contraction at 49.9%, its first sub-50 reading since June 2024. The April trade deficit dropped to $61.8B, with imports falling to $361B and a record level of exports of $289.4B.