Decode Weekly Markets Recap: Highlight and Insights on fourth week of May

米国

Stocks Advance Amid Ongoing Trade Policy Concerns

U.S. equities ended positively in a shorter trading week, despite late-week fluctuations causing major indices to close off their peak levels. Leading gains, the Nasdaq Composite increased by 2.01%, trailed by the S&P 500 at 1.88%, and the Dow Jones Industrial Average at 1.60%. Smaller-cap indices also showed modest gains.

Markets began robustly after President Trump postponed implementing a planned 50% tariff on EU imports, originally announced two days prior, until July 9, highlighting expedited trade negotiations.

Later, a significant boost occurred following the U.S. Court of International Trade’s decision that invalidated most global tariffs imposed during Trump’s second term. Stocks surged initially but retreated after the administration’s quick appeal led a federal appeals court to pause the ruling temporarily. Comments from Treasury Secretary Scott Bessent on stalled U.S.-China trade discussions and speculative remarks by President Trump regarding China’s potential violations of a preliminary agreement dampened market enthusiasm toward week’s end.

Inflation Growth Hits Lowest Level in Four Years

The Bureau of Economic Analysis revealed the core Personal Consumption Expenditures (PCE) index climbed 2.5% annually in April, declining from 2.7% in March, marking the lowest since 2021. However, despite this slowdown, inflation remains notably above the Federal Reserve’s 2% long-term goal, with tariff effects anticipated more clearly by late summer.

The Fed’s May meeting minutes highlighted ongoing inflationary concerns, emphasizing risks skewed upward primarily due to unpredictable trade policies.

Consumer Confidence Improves Following Eased Trade Tensions

Consumer Confidence Index from The Conference Board surged by 12.3 points to 98 in May, recovering from five consecutive months of declines. According to economist Stephanie Guichard, consumer expectations notably improved post the May 12 U.S.-China trade deal.

The University of Michigan’s Consumer Sentiment Index remained unchanged from April, halting four months of declines. Sentiment improvement late-month correlated directly with tariff easing, signaling trade uncertainty as a pivotal influence. Inflation expectations stayed high across both indices.

Treasuries Strengthen Amid Court Ruling Against Tariffs

U.S. Treasury bonds rallied significantly through Thursday due to the Court of International Trade’s ruling on tariff illegality. After a disappointing prior auction of 20-year bonds, Thursday’s 7-year note auction saw robust non-dealer interest, setting records for low dealer awards.

High-yield bonds outperformed treasuries, propelled by equity momentum, tariff-related optimism, and improved consumer sentiment. Investment-grade corporate bonds also performed strongly, driven by high subscription rates.

(Data: Reuters via Yahoo! Finance and Bloomberg)

ヨーロッパ

The STOXX Europe 600 rose 0.65%, benefiting from Trump’s postponement of EU tariffs and expectations of European Central Bank (ECB) rate cuts amid slowing inflation. Germany’s DAX advanced 1.56%, Italy’s FTSE MIB climbed 1.55%, France’s CAC 40 edged up 0.23%, and the UK’s FTSE 100 increased by 0.62%.

Inflation rates moderated in France (0.6%), Italy, and Spain (1.9%), slightly below the ECB’s 2% target, prompting predictions of a June rate cut by economist Tomasz Wieladek. German inflation dipped to 2.1%, still above forecasts.

German unemployment exceeded forecasts, increasing by 34,000 to nearly 3 million, while UK service sector confidence dropped to its lowest level in 2.5 years amid increased taxes and price pressures.

日本

Japanese markets rebounded with Nikkei 225 and TOPIX indices rising 2.17% and 2.41%, respectively, buoyed by optimism for a U.S.-Japan trade deal. Bond yields fell amid increased haven demand. Core Tokyo inflation rose to 3.6%, surpassing forecasts, while unemployment stabilized at 2.5%. Industrial production slightly declined.

中国

Chinese equities retreated amid low trading activity and tariff negotiation pauses. The CSI 300 dropped 1.08%, and the Shanghai Composite declined slightly. Hong Kong’s Hang Seng fell 1.32%. Beijing unveiled RMB 500 billion in infrastructure investments, reinforcing economic stability ahead of trade negotiation deadlines. Authorities contemplate maintaining a stable manufacturing share in the next Five-Year Plan.

その他の市場

ハンガリー kept key interest rates steady at 6.50%, citing high inflation expectations due to trade uncertainties. Policymakers emphasized restrictive policies amid inflation risks despite recent easing.

South Korea cut rates from 2.75% to 2.50%, driven by slowed economic growth expectations and stable inflation around 2%. Officials indicated caution regarding household debt and forex volatility while maintaining an accommodative stance.