Weekly Market Update (June 01, 2025)

Market Hedwig
1 day ago
2 min read

HIGHLIGHTS

S&P500 went up slightly this week, driven by the delay in EU tariffs and the US legal authority initially blocked majority of tariffs.

ECB: Markets expect the ECB to cut rates while remaining non-committal on future policy decisions. The terminal rates will likely be more accommodative, and a negative tariff outcome would be deflationary.

US Policy: Uncertainty is extended due to the complexity of democracy’s checks and balances, which further complicate the plans of Trump’s administration. There are legal challenges that threaten the justification of Trump’s tariffs, while it is likely to be implemented one way or another.

Asia: China exports remain strong in Q2, while there are risks that they would moderate in July. Japan’s officials are confident about their inflation. Presidential election in Korea is one of the key events in Emerging Asia markets. India’s central bank is expected to cut rates by 25bps.

MARKETS

Nasdaq	19,113.77	+2.01%
S&P 500	5,911.69	+1.88%
Dow	42,270.07	+1.60%
10-Year	4.42%	-9bps
Brent	62.69	-2.64%
DXY	99.44	+0.34%

*Data as of market close. 5-day change ending on Friday.

VIEW FROM THE STREET

Equity

UBS: US economic health remains focus with the release of inflation print. Uncertainty continued to elevate and we expect volatility ahead and investors will have to navigate the risks of market, economic and geopolitical factors.

Standard Chartered: We expect US equities to test record highs again in the coming weeks. The markets' focus turns towards the US’s growth-oriented policies.

Fixed Income

Goldman Sachs: Markets are focusing on the risks derived from the rising bond yields. However, it poses minimal risk to S&P500 earnings as most of the companies in S&P500 carry fixed-rate debt with maturity later than 2028. Small-caps carry more floating-rate debt and lower profit margin.

Standard Chartered: Long-term yields have increased globally, especially in Japan. Investors are looking for higher risk premium to compensate for long-term risks as fiscal deficits are rising globally, leading to increased bond supply.

Economy

Goldman Sachs: The US House reconciliation bill is likely to result in an increase in debt-to-GDP ratio, which is already at 100% level. If inflation remains high and recession risk remains low, there are risks that the term premium and bond yields would be pushed higher.

J.P. Morgan: Although the export outlook in China has improved after the truce, 41% tariff rate from the US is still higher than the 11% in 2024. The impact on sectors will vary. China as a dominant supplier would be a great buffer to handle the US.

KNOWLEDGE TRANSFER

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DISCLOSURE

This newsletter is meant for informational purposes only and is not investment advice. Always consult a licensed investment professional before making important investment decisions. Advertising and sponsorship do not influence editorial content or decisions. Market Hedwig is not responsible for the promises made or the quality or reliability of the products or services offered in any advertisement.