Markets pulled back this week. Will seasonal optimism and trends buoy markets for now?
Monday
S&P 500 0.09% | NASDAQ 0.02%
Following a positive week for markets on the back of tariff reprieves, they hit a roadblock after the downgrade of the U.S. credit rating by Moody’s. U.S. Government spending is being closely watching as tax legislation makes its way through the House.
Tuesday
S&P 500 0.39% | NASDAQ 0.38%
The S&P500 fell for the first trading day in a week. No index really stood out on the day as trading momentum stalled.
Wednesday
S&P 500 1.61% | NASDAQ 1.41%
Markets tried to get over the hump but met opposition mid-way through the week. Volatility jumped in equity markets and bond yields continued to climb as worries of holding U.S. debt grew (bond prices fall when yields rise). The 10-year Treasury note rose to its highest level in almost 5 months.
Thursday
S&P 500 0.04% | NASDAQ 0.28%
After several light days of data, Thursday brought some stability with lower initial jobless claims and improvement in Global Manufacturing readings. Lower Existing Home Sales (Apr) held true to recent sentiment as persistently higher mortgage rates limited new listings.
Friday
S&P 500 0.67% | NASDAQ 1.00%
Markets sputtered through the close of the week as fresh tariff threats emerged with the European Union coming into the crosshairs. As has been the case, we won’t know for sure what products will be under the new duties or when they’ll go into effect.
Conclusion
S&P 500 2.61% | NASDAQ 2.47%
The markets gave up recent weekly gains as several bigger announcements shook both equity and bond markets this week. Moody’s Credit Rating Agency downgraded the U.S. Credit score but remains in the higher tier. This occurred in 2011 and 2023 by Standard & Poor’s and Fitch Ratings, respectively. The bond markets experienced the most erratic trading as owners of U.S. debit responded by offloading their holdings. Consumer spending is expected to slow in a time when student loan repayments are now required on defaulted loans, potentially pinching the consumers monthly budgets. There are concerns about a reacceleration of inflation as well which has kept mortgage activity suppressed and earnings projections still dampened although overall stable. We will continue to see if the summer months give us strong spending as summer travel kicks up or if this week’s volatility continues to be the trend.
~ Your Future… Our Services… Together~
Your interest in our articles helps us reach more people. To show your appreciation for this post, please “like” the article on one of the links below:
FOR MORE INFORMATION:
If you would like to receive this weekly article and other timely information follow us, here.
Always remember that while this is a week in review, this does not trigger or relate to trading activity on your account with Financial Future Services. Broad diversification across several asset classes with a long-term holding strategy is the best strategy in any market environment.
Any and all third-party posts or responses to this blog do not reflect the views of the firm and have not been reviewed by the firm for completeness or accuracy.