Week in Review: May 30, 2025

June 2, 2025

Recap & Commentary

Markets ended the holiday shortened week higher following President Trump’s decision at the start of the week to suspend 50% tariffs on imports from the European Union he announced just days earlier. Trade remained a focal point throughout the week following a decision by the U.S. Court of International Trade and new tariff announcements at the end of the week.

On Wednesday, the U.S. Court of International Trade ruled that Trump exceeded his authority when he invoked the International Emergency Economic Powers Act to justify his April 2 “Liberation Day” tariffs. The ruling effectively nullified the vast majority of tariffs Trump has announced since the start of his second term. A day later, however, the Federal Circuit Court of Appeals in Washington paused the lower court’s ruling leaving the tariffs in place for the time being. The separate rulings added further uncertainty to an already complex situation, one that will likely be adjudicated before the Supreme Court.

On Friday, Trump created new uncertainty when he announced plans to double steel and aluminum tariffs to 50% beginning Wednesday, June 4. Trump argued the move will help protect and boost US steel production. In response, the EU said it is prepared to enact various countermeasures.

A week after tepid demand at a 20-Year Treasury auction placed upward pressure on longer-term yields, stronger demand at a 7-Year Treasury auction helped alleviate some of that pressure. For the week, the bellwether 10-Year Treasury yield fell 0.11% to end at 4.41%, a two-week low. The lower rates provided a partial tailwind to equities.

Economic Commentary

A busy week of economic data was headlined by the Fed’s preferred inflation measure along with measures of consumer confidence.

Core PCE inflation, the Fed’s preferred measure, rose 0.1% in April, inline with expectations and the same rate recorded in March. Compared to a year ago, core PCE rose 2.5%, its slowest pace since early 2021. The slowdown mirrored similar trends observed in CPI inflation reported earlier in May.

Consumer sentiment ended May unchanged from April levels after recovering from its mid-month reading following the agreement between the US and China to pause tariffs for 90 days. Despite the pause, consumers’ expectations for future inflation remained elevated with one-year expectations rising 0.1% from April to end at 6.6%, but down from the mid-month reading of 7.3%. Five-year expectations improved slightly from April, ending at 4.2%, down from 4.4%.

Durable goods orders fell 6.3% in April, after rising 7.6% in March. However, an underlying measure that better captures core business spending jumped from 0.3% to 1.3% suggesting an uptick in demand during the month.

Pending home sales which track the number of contracts to buy existing homes fell 6.3% in April after rising 5.5% in March. The large swing highlighted the inherently volatile nature of housing data but also the headwinds the sector continues to face. The contracts tracked by the pending homes sales data typically convert to actual sales one to two months later.

Of Note

Congress resumes work following its Memorial Day recess. All eyes will be on the Senate as it debates the House spending bill, with particular attention on how it addresses proposed spending cuts, including those to Medicaid.

Market Indices (As of 05/30/2025)

• May Employment Report
• ISM Manufacturing
• ISM Services
• JOLTs Job Openings
• Initial Jobless Claims