United States
U.S. equity indexes closed Friday relatively flat, wrapping up a strong month of May—the best monthly performance for both the S&P 500 and the Nasdaq since November 2023. Markets rebounded from early losses after President Trump accused China of violating trade agreements with the U.S. and signaled a more aggressive approach moving forward. Earlier in the day, Treasury Secretary Bessent noted that trade negotiations between the U.S. and China were “a bit stalled.”
By the close, the Dow Jones Industrial Average rose 54 points (+0.13%) to finish at 42,270. The Nasdaq slipped 0.32% to 19,113, while the S&P 500 ended unchanged at 5,911. Of the eleven sectors in the S&P, seven posted gains and four declined, though most moves were modest.
Consumer staples outperformed, gaining 1.16%, with Costco leading the sector. Its shares rose 3.12% to $1,040.18 after Thursday’s strong earnings report, which showed a 13% year-on-year increase and led several analysts to raise their price targets. Walmart also contributed to the gains, rising 1.67%.
Nvidia shares declined 2.92% to $135.13 after a sharp post-earnings rally earlier in the week. Tesla also saw profit-taking, falling 3.34% to $346.46. Most other major tech stocks saw only marginal changes.
On the economic front, the Personal Consumption Expenditures (PCE) Price Index—the Federal Reserve’s preferred inflation gauge—fell to 2.1% in April from 2.3% in March, bringing it closer to the Fed’s 2% inflation target. The Core PCE also fell to a level of 2.5% annually. However, the data released also showed slowing growth in consumer spending and a rise in personal savings, suggesting consumers may be growing more cautious as new tariffs begin to impact the real economy.
Bond yields declined, with the 10-year Treasury yield down 3 basis points to 4.40% and the 2-year yield falling 4 basis points to 3.90%. The U.S. dollar was little changed, up 0.07% on the Bloomberg Dollar Index.
Looking ahead, investors will be watching for May employment data due later this week, along with remarks from Federal Reserve Chair Jerome Powell scheduled for Tuesday evening.
Europe
European shares posted modest gains on Friday, with the Euro Stoxx 600 rising 0.14% to close at 548.67. For the month, the index advanced over 4%, marking its first monthly gain in three months. In the UK, the FTSE 100 added 0.64% to finish at 8,772. Both indexes pulled back from their intraday highs following renewed trade tensions between China and the U.S., triggered by remarks from President Trump.
Defensive sectors such as healthcare and utilities outperformed, as investors grew wary of a potential resurgence in trade conflict driven by public statements. In contrast, the technology sector was the day’s weakest performer.
In Germany, inflation eased to 2.1% in May, though the decline was smaller than economists had anticipated. Bond yields across the eurozone saw minimal movement, with the benchmark German 10-year yield rising by 1 basis point to 1.77%.
Australia
On Friday, the Australian share market ended the week and the month on a stronger note. The ASX 200 rose by 24 points (+0.30%) to close at 8,434.70. Over the month, the index gained 3.8% and reached a 14-week high. Sector performance was mixed, with four sectors ending lower—led by energy—while seven sectors finished higher, with utilities and financials leading the gains. Investors largely looked through news that a U.S. court-imposed ban on tariffs had been overturned on appeal.
Among financial stocks, Westpac performed strongly, rising 2.68% (+85 cents) to close at $32.56. The bank announced it would relax its criteria for assessing energy-related lending, making it easier to finance gas projects. Commonwealth Bank also moved higher, gaining 0.87% to $175.59, approaching its all-time highs.
Healthcare stocks were mixed. Sigma Healthcare declined 1.58% to $3.12 following reports of insider selling by those who had received shares through the Chemist Warehouse acquisition. In contrast, Fisher & Paykel advanced 5.27% after receiving broker upgrades in the wake of its recent earnings report. Ramsay Health Care gained 5.89% to $38.30 following approval of its expansion plans in New South Wales by the planning commission.
Two stocks reversed their trends from earlier in the week. Origin Energy bounced back 2.08% to $10.82, leading gains in the utilities sector after being sold off due to a lowered outlook from a key UK business. Woodside retreated 2.11% to $22.25 as profit-taking emerged following recent gains on the back of government approval to extend operations at the Northwest Shelf gas project through to 2070. Despite the pullback, Woodside ended the week 3.1% higher.
April retail sales fell 0.1%, missing expectations for a modest rise. The decline was largely due to reduced demand for clothing, attributed to unseasonably warm weather. Bond yields moved lower, with the 10-year yield down 7 basis points to 4.25% and the 2-year yield also falling by 7 basis points to 3.28%.
ASX 200 futures traded quietly overnight, closing 8 points higher (+0.09%). The Australian dollar begins the week at 0.6431 against the U.S. dollar.
Commodities
Oil prices ended slightly lower on Friday as traders awaited the outcome of the OPEC+ meeting over the weekend. West Texas Intermediate edged down 0.25% to US$60.79, while Brent crude declined more sharply, falling 57 cents (-0.9%) to close at US$62.78. On Saturday, OPEC+ announced an increase in production of 411,000 barrels per day for July, citing a steady global economic outlook and solid fundamentals as justification for the move, which is aimed at regaining market share.
In the United States, supply data showed weekly rig counts falling for a fifth consecutive week, as lower oil prices continue to make some operations economically unviable. The number of active oil and gas rigs in the U.S. is now at its lowest level since November 2021.
Copper prices declined by US$70 (-0.73%) to US$9,498 per tonne on the London Metal Exchange. While concerns over tariffs have weighed on sentiment, a deeper selloff has been tempered by fears of supply shortages. Over the weekend, China released its official manufacturing PMI, which rose to 49.5 in May—an improvement, but still below the 50 level that signals expansion. The result has increased expectations for additional stimulus measures in China.
Elsewhere in news that will impact industrial commodities, President Trump announced plans to raise tariffs on steel and aluminium to 50% from their current 25% level, effective from June 4.
Gold declined by 0.86% to US$3,289, driven by profit-taking and a slightly stronger U.S. dollar. Silver also fell, losing 1.01% to close at US$32.98.
Bitcoin continued its slide, trading at US$105,116, down 1.0% from Thursday’s close.
Economic Calendar
AU:
- ANZ-Indeed Job Advertisements (May) – 11.30am
US:
- ISM Manufacturing Index (May) – 12:00am
- Construction Spending (April) – 12:00am
This article was written by Paul Darwell, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
