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The Flash Services PMI came in at 53.1 compared to an expected 52.9, which means that the service sector is still in a period of expansion. The Flash Manufacturing PMI was also above 50 coming in at 52 compared to an expected 51.1. In addition, the April report was revised upward to 53.7. While this may be a sign of an unexpectedly resilient economy, it could also be the result of buying done prior to the implementation of Trump’s new tariffs.

On Tuesday and Wednesday, Federal Reserve Chair Jerome Powell gave testimony in front of members of the Senate. Powell urged the need for restraint in the face of pressure from President Trump to cut rates by up to 250 basis points. He believes that evidence of inflation from those tariffs will start to appear in the data by some point in July. Also notably, he mentioned that he was in support of student loan forgiveness but had no opinion on tariffs other than he believed that they were inflationary.

On Thursday, the final GDP figures for the first quarter were made public. During the first three months of the year, the economy contracted by .5 percent compared to an expected contraction of .2 percent. However, it’s expected that the second quarter will show an improvement because of activity conducted in April. Therefore, it’s unlikely that the economy will fall into a technical recession.

Also on Thursday, unemployment claims data for the past week came out. Over the past seven days, there were 236,000 requests for benefits, roughly 10,000 fewer than the prior week. Analysts had expected 244,000 requests for benefits this week prior to the release.

On Friday, the Core PCE Price Index for May came out, and it showed that prices increased by .2 percent in May compared to an expected .1 percent. Personal income was down 0.4 percent for the past month while spending was down 0.1 percent during that same period. This may be a sign that the economy is weakening or that inflation may rise. Either way, it could alter the Fed’s projected path of two or three rate cuts over the second half of 2025.

The S&P 500 broke above 6,100 this week, which is close to both yearly and all-time highs for the index. This is in spite of the fact that the index dipped about 20 percent over a period of three weeks in April. Ultimately, this has been one of the fastest bear market cycles and recoveries in history.

The Dow has also largely recovered from its April slump and is also closing in on yearly and all-time highs. It made a weekly low on Tuesday of 42,070 before reversing and spending the next three days making gains.

In international news, Canada announced on Tuesday that its common CPI was 2.6 percent for the year while inflation overall grew by .6 percent over the past month. On Thursday, Japan announced that its inflation rate was 3.1 percent on an annual basis while retail sales were up 2.2 percent on an annual basis.

The upcoming week is likely to be a muted one given the Independence Day holiday on Friday. However, there are still some major announcements on the schedule including the ADP nonfarm payroll report on Wednesday and the Bureau of Labor Statistics (BLS) nonfarm payroll report coming out on Thursday.

The third week in June was another consequential one despite the markets being closed for the Juneteenth holiday. There were several scheduled news releases that provided volatility to the market such as the release of retail sales and unemployment claims figures. The Federal Reserve made its interest rate decision for June and also made some comments about how it might proceed in terms of long-term monetary policy.

On Tuesday, retail sales data was made public, and in May, retail sales were down 0.9 percent overall while core retail sales were down 0.3 percent. It was believed that overall retail sales would be down 0.5 percent in May while core retail sales were expected to rise by 0.2 percent. April retail sales were revised downward to show that sales were down 0.1 percent while core retail sales were flat.

On Wednesday morning, the unemployment claims for the past week was made public. Over the last seven days, there were 245,000 requests for benefits, roughly in line with expectations. That afternoon, the Federal Reserve opted to keep interest rates where they were, which was a range of 4.25 percent to 4.5 percent.

Fed Chair Jerome has said that tariffs might lead to higher prices in the future, and that keeping rates where they are gives the Fed more flexibility to take action if that occurs. One voting member of the FOMC said that the Fed could possibly be in position to cut rates in July.
Poor retail sales numbers and other data have hinted to the possibility that the American consumer may be in a vulnerable state, which could force the Fed to ease policy. However, there is no way to know what the Fed is going to do until the next meeting roughly 30 days from now.

On Friday, the last piece of important news came out in the form of the Philadelphia Fed Manufacturing Index. It came in at negative 4 compared to an expected negative 1.7.

The S&P 500 was down 38 points this week to close at 5,967 at the end of trading Friday. The market had climbed as high as 6,046 on Monday before reversing and falling to a weekly low of 5,959 on Friday morning. After the 0.64 percent loss this week, the index is currently up 0.39 percent over the past month.

Like the S&P, the Dow was also lower finishing down 276 points over the past five trading days to finish at 42,206 on Friday. Over the past five days, the market made a high of 42,698 and a low of 42,130. The high of the week came on Monday while the low came on Wednesday.

As with the other two major indexes, the Nasdaq was largely constrained within a trading range this week. It fell 42 points to close at 19,447 at the close of trading on Friday. Over the past five days, the market made a high of 19,716 and a low of 19,408. The high of the week occurred on Monday while the low occurred on Friday.

In international news, Switzerland announced on Thursday morning that it was cutting its key interest rate to 0 percent from .25 percent. In addition, Great Britain announced later that day that it would keep that nation’s key interest rate at 4.25 percent. Early Friday, Great Britain announced that retail sales in the nation had dropped by 2.7 percent in May. On Monday, Japan announced that it would also keep its key interest rate unchanged at .5 percent.

The upcoming week will be another interesting one for market participants as several news releases are on the schedule. On Monday, the Flash Services PMI and Flash Manufacturing PMI will be made public. Jerome Powell is expected to give testimony on Tuesday and Wednesday. The Core PCE Index will be out on Friday morning, which is the Fed’s preferred inflation gauge. It’s expected inflation increased by .1 percent in May.

The past week was an interesting one for market participants as a mixture of scheduled news releases and unscheduled events created significant volatility. Most notably, Isreal launched attacks on Iran late Thursday night into Friday morning that resulted in the deaths of high-ranking officials.

News of the attacks sent oil prices spiking nearly 13 percent to reach highs of over $75 in intraday trading on Friday. Gold prices were also higher while the stock prices of travel, energy and other companies in relevant industries moved wildly in early morning trading.

Tariff news also dominated headlines this week as the United States and China agreed to a draft trade deal. The main takeaways were that China would face a 55 percent tariff on most goods while the nation would also approve applications from American companies for magnets. It’s expected that the overall deal will make it easier for the United States to make use of rare Earth metals that are sourced from China.

Perhaps the biggest scheduled news event of the week occurred on Wednesday when the CPI report was released. In May, inflation was at 2.4 percent on an annualized basis, which was slightly lower than the predicted 2.5 percent. On a monthly basis, inflation was up .1 percent, which was also slightly lower than the predicted rise of .2 percent.

Prices also rose slower than anticipated in the month of May. On Thursday, it was revealed that the Price Producers Index (PPI) for that month showed an increase of .1 percent compared to an expected rise of .2 percent. Price change data from April was revised to show that prices had dropped by .2 percent during that month.

Unemployment claims data also came out on Thursday, and over the last seven days, there were 248,000 requests for benefits. This figure matched the one from the previous week and was about 6,000 claims higher than expected before the report came out.

On Friday, the University of Michigan released its consumer sentiment and inflation expectation reports. Consumer confidence came in at 60.5 compared to a projected 53.5 while inflation expectations were down to 5.1 percent from 6.6 percent a month ago.

For the week, the S&P 500 was down .51 percent to close at 5,976. This represented a drop of almost 31 points for the index that has been in a trading range for the past couple of weeks. The high of the week came on Wednesday when the market hit 6,058 while the low of the week came on Friday when the index hit 5,970.

The Dow was also down for the week closing off 1.27 percent to finish at 42,197. For the week, the index shaved 540 points and is currently up just .003 percent for the month of June. As with the S&P 500, the Dow made its high of the week on Wednesday of 43,105 before reversing and closing near its weekly low of 42,110 made on Friday morning.

Finally, the Nasdaq was down .91 percent to finish the week at 19,406. The index lost about 184 points this week, but it is still up about 5 percent for the month. The weekly high was made on Wednesday at 19,786 while the weekly low was made on Friday afternoon when the index dipped to 19,380.

In international news, China announced on Sunday that its inflation rate was in the negative for the month of May. On Thursday evening, Great Britain announced that its gross domestic product (GDP) fell by .3 percent in May.

This week is shaping up to be another interesting one for market participants as tariff and geopolitical tensions will likely continue to dominate headlines. However, investors should also keep an eye on retail sale data coming out on Tuesday and the Federal Reserve making its June interest rate decision on Wednesday. The Fed is expected to announce that it will keep rates at 4.5 percent and continue to pause until at least September. Japan, Great Britain and Switzerland will also announce rate decisions this upcoming week.