Weekly Market Performance — June 06, 2025

Markets Blog

David Matzko, LPL Research

LPL Research provides its Weekly Market Performance for the week of June 2, 2025. U.S. stocks celebrated the unofficial first full trading week of summer with solid gains. Equities garnered support from the latest batch of jobs data, reinforcing the U.S. economic resilience narrative and positive-leaning trade headlines. Overseas, European equities gained ground with a number of local factors at play, while Asian markets ended mostly higher. Treasuries declined as markets pared back bets on Federal Reserve (Fed) rate cuts, and commodities broadly advanced on the back of crude oil and metals.ulled between local and global headlines. Treasury yields ended lower while commodities broadly fell.

Index Performance

U.S. and International Equities

U.S. Equities: Through a flurry of headlines, equities advanced in four out of five trading sessions to start the month of June with solid weekly gains, led by the growth-laden Nasdaq. Labor market data was the key focus on the macro front this week, with sentiment receiving a lift from an unexpected increase in job openings last month, according to the latest JOLTS jobs report. Investors refrained from making outsized bets leading up to Friday’s much-anticipated nonfarm payrolls report but rallied after Bureau of Labor Statistics data showed hiring slowed less than expected last month. Friday’s payrolls data alleviated concerns of an imminent economic slowdown after a rift via social media between former government advisor Elon Musk and President Donald Trump weighed on sentiment Thursday.

Jobs data broadly overshadowed trade updates throughout the week, with a muted market reaction to President Donald Trump signing a directive to hike steel and aluminum levies from 25% to 50%. Later in the week, investors also appeared to shrug off trade talks directly between President Xi Jinping of China and his American counterpart, which yielded plans for future talks and positive remarks from the White House, although markets noted few concrete developments. Corporate news was light with earnings season winding down. However, shares of chipmaker Broadcom (AVGO) traded lower following its Thursday afternoon report, which topped estimates but failed to meet Wall Street’s lofty expectations.

International Equities: The European benchmark STOXX 600 Index ended modestly higher. Between the Memorial Day holiday in the U.S. and some local markets shuttering exchanges for the Ascension Day holiday, trading volume was thin. The region broadly received a boost from a notable upturn in consumer confidence in May but faded slightly over the latter half of the week. Support stemmed from reports suggesting that EU trade policy negotiators could take a moderate stance in order to make progress in trade talks, and European Central Bank (ECB) survey data indicating inflation expectations ticked higher ahead of next week’s widely expected ECB rate cut. However, gains were measured as investors parsed trade updates and a flurry of data on Friday, including a sharp month-over-month drop in German retail sales from -0.2% in March to -1.1% in April.

Asian stocks ended mixed, with greater China leading losses amid the latest U.S. trade developments. Japanese equities moved higher, with brief U.S. tariff optimism following the CIT decision bolstering the weekly advance. Sentiment remained frothy as Bank of Japan (BOJ) officials’ attempt to calm markets after last week’s bond sell-off collided with the weakest 40-year auction in two years, placing downward pressure on stocks. South Korea also printed a solid gain on the back of bolstered rate cut bets after the Bank of Korea slashed economic growth forecasts and delivered a 0.25% rate cut. Taiwan ended an abbreviated week lower amid signs of deteriorating consumer sentiment and a downtick in economic growth estimates.

Fixed Income, Currency, and Commodity Markets

Fixed Income: The Bloomberg U.S. Aggregate Index traded lower this week. The monetary policy rate-sensitive two-year yield ended roughly 14 basis points (0.14%) higher than when the week started, and the 10-year yield ended up roughly nine basis points (0.09%). After logging their first monthly decline of 2025, Treasuries continued to succumb to pressure from ongoing concerns over the nation’s fiscal outlook and scrutiny surrounding President Trump’s reconciliation bill, currently attempting to make its way through the U.S. Senate. However, Treasuries nearly erased week-to-date losses after a weaker-than-expected ADP employment change and ISM services data on Wednesday reinforced speculation the Federal Reserve (Fed) will cut rates at least twice this year, sending Treasuries higher and yields lower. Nonetheless, yields resumed their move higher the remainder of the week after weekly jobless claims data came in above forecasts, and continued to climb on Friday after stronger-than-anticipated jobs data led traders to pare back rate cut bets.

Commodities and Currencies: The broader commodities complex bounced back from last week’s slide with a solid advance, measured by the Bloomberg Commodities Index. Geopolitical risks from Ukraine’s drone strike deep in Russian territory broadly supported crude prices, while OPEC+’s latest output increase was taken as a signal of confidence in economic conditions by investors. U.S. oil rig counts declining to 2021 lows and Canadian wildfires cutting into supply were also bullish developments for crude. Gold prices extended their 2025 rally for another week, trimming gains on Thursday and Friday as the economic resilience narrative regained traction following Friday’s jobs data, erasing gains from mixed labor market data takeaways earlier in the week. Meanwhile, silver and copper both outperformed the yellow metal over the last five days. In currencies, the dollar edged lower, recouping intra-week losses on the better-than-feared payrolls report despite heightened scrutiny around the greenback.

Economic Weekly Roundup

Soft Landing So Far. Total nonfarm payroll employment increased by 139,000 in May, similar to the average monthly gain of 149,000 over the prior 12 months. Average hourly earnings rose 0.4% from a month ago and 3.9% from last year. Wages rose faster than inflation, giving workers some relief from nagging cost pressures. The unemployment rate was unchanged at 4.2% and has been rangebound for the past year. The percentage of the population employed was 59.7%, a decline from last month and still below the January 2020 level, but that’s because of the 55+ cohort. Federal payrolls fell by 22,000, the fourth consecutive decline in federal government payrolls. Note: Federal employees receiving ongoing severance pay are counted as employed in the establishment survey. The run-rates for goods and services producing firms were a bit softer than pre-pandemic rates.

Without a negative catalyst, the slowdown in the job market could be fairly smooth but with a few intermittent bumps from trade uncertainty. However, tariffs could be that "negative catalyst" and especially squelch the job market for manufacturing, construction, and technology. Nevertheless, we should expect upward pressure on rates (both retail and funding), especially as the Fed remains in “wait and see” mode.

Hiring Rate Rebounded in Construction and Leisure/Hospitality Sectors. In April, the job market was especially strong in construction, hotels, and restaurants, although this could be a temporary boost. The opening-to-unemployed ratio is back to normal, although the data still shows a tight labor market. The hiring rate strongly rebounded in the construction sector, partially due to activity in new home construction. Quit rates declined for most industries as workers were less likely to take the risk of ending their employment in hopes of finding better opportunities. Federal separations increased in April, mostly in the northeast. We expect this category to increase further in the coming months.

The labor market is returning to more normal levels despite the uncertainty within the macro outlook. Underlying patterns in hirings and firings suggest the labor market is holding steady. Although the soft data indicate more weakness than the hard data, workers have the means to keep spending as we’ve heard from some large retailers. If the labor market holds, the Fed can remain in the “wait and see” mode before it restarts its rate cutting.

The Week Ahead

The following economic data is slated for the week ahead:

• Monday: Wholesale Trade Sales (Apr), Wholesale Inventories (Apr final), New York Fed One-Year Inflation Expectations (May)

• Tuesday: NFIB Small Business Optimism (May)

• Wednesday: MBA Mortgage Applications (Jun 6), Headline and Core CPI (May), Real Average Hourly Earnings (May), Real Average Weekly Earnings (May), Federal Budget Balance (May)

• Thursday: Headline and Core PPI (May), Initial Jobless Claims (Jun 7), Continuing Jobless Claims (May 31), Household Change in Net Worth (1Q)

• Friday: University of Michigan Consumer Sentiment Report (Jun preliminary)

IMPORTANT DISCLOSURES

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