Last week, the US equities market closed around 1 to 2% up, with the S&P 500 achieving its highest monthly gain since November 2023, and its strongest May in 35 years, rising 6.2%. The Technology sector led the way, climbing almost 10% in May. These gains were primarily driven by solid earnings, with Nvidia and other tech giants delivering positive results and strong guidance.
Trade tensions remain a key factor influencing market sentiment. While a temporary easing of tariffs provided some relief in May, there are new mutual accusations between the US and China of breaching trade deals. Meanwhile, the European Union has warned that it may speed up retaliatory measures if Trump follows through on his recent tariff threats.
In the US macro front, despite current challenges, the latest data showed a resilient economy, with consumer spending growth still positive, and personal income data stronger than expected. The still solid economic outlook is also reflected in expectations for Federal Reserve rate cuts, with markets now pricing in 50 basis points of cuts this year, down from the 100 basis points anticipated just a month ago.
