Weekly market recap & what's ahead

2 June 2025 (recap week of 26 to 30 May 2025)

Headlines & introduction

Markets swung sharply on tariff headlines, central bank signals, and volatile economic data. US and European equities responded to President Trump’s tariff threats, shifting court rulings, and persistent macro uncertainty. Tech names like Nvidia stood out on earnings. Volatility began the week elevated but faded as stocks rallied. Crypto cooled but ETF inflows continued. The focus now shifts to US jobs data and major central bank speakers.

Equities

US:

• Tariff fears dominated early in the week, with the S&P 500, Nasdaq, and Dow each down over 2.5% on 27 May (reflecting 26 May trading), led by Apple dropping 7.6% on EU tariff threats.
• On 28 May, Trump postponed EU tariffs, sparking a relief rally (S&P 500 +2.05%, Nasdaq +2.47%). Nvidia rose 3% ahead of earnings, Tesla jumped 6.5%.
• By 29 May, Nvidia’s strong results after hours (+5%) kept tech in focus, but a trade court blocked most tariffs.
• On 30 May, the S&P 500 and Nasdaq gained just 0.4% after an appeals court reinstated tariffs, capping earlier optimism.
• Friday (reflecting 30 May): The S&P 500 closed flat, the Nasdaq slipped 0.3%, and the Dow added 0.13%. Ulta Beauty gained 11.8% on raised guidance, while Gap fell 20% on sales.

Europe:

• EU stocks rebounded after Trump delayed tariffs, with the STOXX 50 up 1.3% and DAX up 1.68% on 27 May.
• Defensive sectors and exporters remained in focus as tariff scares continued.
• On Thursday, early gains faded as legal uncertainties returned.
• By Friday, European stocks ended May strongly, with the STOXX 600 up 4% for the month and DAX up 7.1%, driven by easing inflation data and rising ECB rate cut hopes.

Asia:

• The Nikkei and Hang Seng were volatile, following US tariff headlines and sector rotations. Chinese industrial profits offered support, but tech and EV stocks lagged due to US-China tensions and profit-taking.

Volatility

Volatility started the week elevated, as the VIX closed at 22.29 on Friday, May 23rd (the previous week), reflecting market anxiety over tariffs and policy risks. As the week progressed, volatility steadily declined: by Wednesday, May 28, the VIX closed at 18.96 as stocks rallied and risk appetite improved. Short-term indicators (VIX1D and VIX9D) also dropped sharply. By early June, the VIX held steady near 18.6, signaling a return to calmer conditions—though caution persisted ahead of key economic data and central bank meetings.

Digital assets

Bitcoin softened, ending the week near $104,900 (30 May), while Ethereum edged down to $2,493.

• BlackRock’s IBIT ETF took in $530 million last week, with assets reaching $72 billion.
• ETHA (Ethereum ETF) also saw strong inflows.
• Major crypto stocks like COIN, MSTR, and MARA underperformed as traders took profits and sentiment cooled.

Fixed income

US treasury yields at the long end moved lower midweek, with the 10-year trading as low as 4.40% on 28 May, before stabilizing just below 5% by week’s end.

• Japanese long bond yields swung on auction adjustments and policy signals.
• European Bund yields drifted lower as inflation cooled and ECB rate cut hopes increased.
• US high-yield spreads tightened early in the week, then widened by 4 basis points to 315 basis points by Friday.

Commodities

Gold fell below $3,300 midweek but rebounded late as trade and geopolitical risks increased.

• Crude oil was volatile, recovering after the OPEC+ meeting and renewed geopolitical headlines.
• Copper rallied on tariff speculation and supply disruptions.
• Uranium-related stocks and ETFs surged on US executive orders supporting the nuclear sector.

Currencies

The US dollar strengthened early in the week, especially against the yen (USDJPY above 146.00 after Japanese policy news), but softened by Friday after weaker US data.

• EURUSD reclaimed 1.1370 by the end of the week.
• GBP held near 1.3500 despite mixed domestic data.
• NZD rallied after a hawkish RBNZ rate cut.

Key takeaways

• Tariff headlines drove sharp swings in equities and sentiment.
• Nvidia outperformed; tech and AI remained in focus.
• VIX volatility began high but faded as stocks rallied.
• Bitcoin and Ethereum softened, but IBIT and ETHA ETF inflows remained strong.
• Bond yields dropped on policy shifts and ECB expectations.
• Gold, oil, and copper rebounded late on macro and geopolitical risks.
• The US dollar was volatile, with late-week weakness as economic data disappointed.

Looking ahead (2 to 6 June 2025)

• Key events: US May jobs report (Friday), Fed chair Powell’s comments, updates on the trade deficit, consumer credit, and factory orders.
• Earnings: CrowdStrike, Broadcom, Dollar Tree, Five Below, Lululemon.
• Macro: Ongoing trade/tariff updates and an ECB rate decision.
• Markets remain focused on labor data, inflation, and central bank signals.

Conclusion

Markets ended May on a cautious but resilient note, with major indices recovering from tariff-driven volatility and central bank uncertainty. While headline risks remain, particularly around trade policy and economic growth, investors shifted focus to the upcoming jobs data and key earnings. As volatility eased, markets appeared better positioned, but global uncertainties suggest the outlook remains fluid heading into June.