Market Outlook Cools After Red-Hot May; Fed Signals “Good News” Cuts Possible in 2025
📉 Wall Street Pulls Back on Trade Worries
U.S. stock futures edged lower Monday as renewed trade friction between the U.S. and China overshadowed optimism from a stellar May rally. At last check:
- S&P 500 futures: -0.5%
- Dow futures: -0.4%
- Nasdaq 100 futures: -0.6%
Tensions reignited after China pushed back on U.S. claims it had violated a tariff truce, instead blaming Washington for failing to uphold the agreement. This tit-for-tat has dampened hopes for a trade deal reboot, compounding uncertainty just as legal battles continue over President Trump’s move to double tariffs on steel and aluminum.
đź’µ Dollar Dips, Gold Rises as Risk-Off Mood Builds
The U.S. dollar weakened amid rising fears of inflation and growth headwinds. Meanwhile, gold futures climbed as investors sought safety, further rattled by Ukraine’s drone attacks on Russia over the weekend, which added a geopolitical risk premium to the market narrative.
đź“… All Eyes on Key U.S. Economic Data This Week
After the S&P 500 gained over 6% in May — its best May since 1990 — traders are bracing for a potential reality check:
- Monday: ISM and S&P Global factory activity updates
- Friday: Nonfarm payrolls report — a critical read on labor market strength and wage pressures
These numbers will help shape expectations for Fed policy in 2025, especially after Governor Christopher Waller suggested over the weekend that any tariff-related inflation could be “temporary” — opening the door to interest rate cuts next year.
🧾 Earnings in Focus: CrowdStrike, Broadcom, DocuSign, Lululemon
While the Q1 earnings season is nearly complete, investors will watch closely this week as major names like CrowdStrike (CRWD), Broadcom (AVGO), DocuSign (DOCU), and Lululemon (LULU) report results.
🧠Takeaway: Trade Tensions Are Back on the Radar
Markets are starting June on uncertain footing. With Trump-era tariffs returning to headlines and China pushing back, investor sensitivity to policy headlines is rising again. Add in upcoming economic data and Fed speak, and volatility may tick higher as the post-Memorial Day reality sets in.
