U.S.Markets: A Day of recovery

The Dow Jones Industrial average (DJIA) closed at 42,270.07 points,a gain of 54.34 points, or 0.13%.This increase occurred despite volatile trading conditions fueled by anxieties over trade relations between the U.S. and China.

• S&P 500: 5,911.69,down 0.48 points (-0.01%)
• NASDAQ: 19,113.77, down 62.11 points (-0.32%)

Despite a shaky start, U.S. stocks rebounded, marking a strong end to the month. The S&P 500 experienced its best month since 1990, rising by 6.2%. The NASDAQ also saw significant gains, climbing 9.6% due to the strength of the technology sector.

For the week, the S&P 500 increased by 1.9%, the Dow by 1.6%, and the NASDAQ by 2%.

Trade Tensions and Market Reaction

Early trading was impacted by President Trump’s social media post alleging that China had violated the existing trade agreement. Bloomberg later reported that the U.S. government was considering expanding restrictions on the Chinese technology sector. This news followed comments from the Treasury Secretary, who stated in a Fox News interview that trade negotiations with China had stalled.

The overall reaction of the market is quite quiet. Because if Trump threatens the trade war he will retreat After Trump said in the afternoon of He will talk to President Si. Jinping of China And hope to be able to resolve trade and tax conflicts

However, the market’s reaction remained subdued, possibly due to expectations that Trump might soften his stance. Later in the day, Trump indicated he would speak with president Xi Jinping of China, expressing hope for resolving trade and tax disputes.

Economic indicators: Inflation in Focus

Economic data released by the Commerce Department revealed insights into inflation, a key factor monitored by the Federal Reserve (Fed). The Personal Consumption Expenditures (PCE) price Index, a gauge of inflation, showed:

• Headline PCE: 2.1% in April, compared to an expected 2.2% and a previous 2.3% in March.
• Core PCE (excluding food and energy): Increased by 2.5% annually, aligning with expectations and down from 2.7% in March.

The University of Michigan’s consumer survey indicated reduced negativity and lower inflation expectations following the U.S.-China trade war developments.

• Consumer Confidence Index (May): 52.2, stable from April but down 24.5% year-over-year.
• 1-Year Inflation expectations: 6.6%, still high but decreased from mid-month levels.
• 5-Year Inflation Expectations: Slightly reduced to 4.2%, the first decline since December.

Individual Stock Highlights

Costco shares rose by over 3% after the company’s third-quarter earnings exceeded expectations,with sales increasing by 8% compared to the same period last year.

European Markets: Closing on a High Note

European stock markets closed higher, ending the month with gains despite the uncertain trade environment. Investors are closely watching President Trump’s tax policies and their potential impact.

The Stoxx 600 index marked its first increase in three months, rising by 4% for the month and closing the week positively. This was partly driven by Trump’s decision to postpone taxes with the European Union, offering an possibility for trade agreements. Concerns over U.S. fiscal policy have also led investors to seek assets outside the United States.

Most industrial groups saw gains, with public utilities and medical groups increasing by 0.8%. However, construction and materials groups decreased by 1%, reaching their lowest levels.

The European aviation and defense index was the top performer this month, increasing by approximately 14%, fueled by hopes of peace negotiations between Russia and Ukraine.

Germany’s DAX 40 index closed up by 0.3%, supported by data showing a decrease in Germany’s inflation rate to 2%, closer to the European Central Bank’s target. This could potentially lead to interest rate reductions next week.

However, German retail sales decreased by 1.1% in April compared to the previous month.

european Market Closings:

• Stoxx 600: 548.67, up 0.79 points (+0.14%)
• FTSE 100 (London): 8,772.38, up 55.93 points (+0.64%)
• CAC-40 (France): 7,751.89, down 27.83 points (-0.36%)
• DAX (Germany): 23,997.48, up 64.25 points (+0.27%)

M&G shares, representing insurance and British asset management companies, rose by 5.5% following the announcement that Dai-Chi Life Holdings, a Japanese life insurance company, would acquire a 15% stake as part of a strategic agreement.

Conversely, SANOFI shares, a French pharmaceutical company, fell by 4.8% to their lowest level in over a year after its experimental drug, Itepekimab, failed to meet certain conditions. Carrefour shares also declined by 6% after closing the dividend registration book (XD).

Commodities: Crude Oil prices Dip

WTI crude oil for July delivery decreased by 15 cents, or 0.25%, closing at $60.79 per barrel. Brent crude oil for Northern Seafood delivery in July fell by 25 cents, or 0.39%, closing at $63.90 per barrel.

Frequently asked Questions

Why did the Dow Jones increase slightly?

The Dow Jones increased due to investors overlooking trade war concerns and positive economic data.

What impacted European markets positively?

European markets were boosted by Trump’s decision to postpone taxes with the EU and hopes for trade agreements.

what caused the drop in SANOFI shares?

SANOFI shares fell after its experimental drug, Itepekimab, failed to meet certain conditions.