Unify Financial Advisors Weekly Market Update
Markets erased weekly gains on Friday following tensions in the Middle East resulting from the Israel-Iran conflict. The S&P 500 declined 0.39%, bringing the YTD gain to 1.62%, while aggregate bonds have outperformed, up 2.69% YTD. Crude oil prices surged on fears that Middle East tensions could restrict global supply. However, as a net exporter of oil, the US is less exposed to oil shocks than in the past.
Economic data released last week reflected moderating inflation. The Consumer Price Index (CPI) rose 0.1% in May and 2.4% year-over-year. The Producer Price Index (PPI) also rose 0.1% in May, reflecting a 2.6% annual increase. Overall, inflation remains relatively subdued, although some economists expect tariffs to raise inflation in the second half of 2025.
Looking Ahead
All eyes are on this week’s Federal Reserve meeting, where expectations for a June rate cut are a long shot, with a 99.9% probability that the Fed will hold rates steady following Wednesday’s meeting. Signs of labor market weakness and moderating inflation have the current probability of a September rate cut at 57.7%.
For a more detailed analysis of last week’s markets and economic trends, check out the latest issue of Market Week.
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Regards,
David Bennett