Stock Markets
Major U.S. stock indexes posted gains this week, continuing their upward momentum despite tariff-related uncertainties. The Dow Jones Industrial Average (DJIA) rose by 0.19% to close at 44,541, while the S&P 500 advanced 0.27% to 6,280, and the Nasdaq Composite edged up 0.09% to 20,630. The Russell 2000 outperformed with a 0.48% gain, closing at 2,263. The CBOE Volatility Index (VIX) remained subdued, falling below 16, indicating low market expectations for near-term volatility despite upcoming economic data and tariff deadlines. Sector performance was mixed, with transportation stocks, particularly airlines, leading gains after strong earnings from Delta Air Lines. Technology and communication services saw some weakness due to profit-taking in software stocks, while small-cap stocks continued to outperform large-cap growth stocks.
U.S. Economy
Economic data this week presented a resilient yet cautious picture. The Labor Department reported initial jobless claims for the week ending July 5 at 227,000, a decrease of 5,000 from the prior week and below the consensus estimate of 235,000. Continuing claims rose slightly to 1.965 million, near a three-year high. Nonfarm payrolls for June added 147,000 jobs, surpassing expectations of 118,000, with the unemployment rate dropping to 4.1%. The Consumer Price Index (CPI) held steady at 2.35% year-over-year in May, with core CPI at 2.79%. Personal spending contracted by 0.14% month-over-month, signaling potential consumer fatigue. Real GDP growth for Q1 2025 was revised down to -0.5% annualized, driven by stronger imports and inventory adjustments. The Federal Reserve’s June meeting minutes highlighted a divergence among officials on the inflationary impact of tariffs, with expectations for two rate cuts in 2025, potentially starting in September.
Metals and Mining
Precious metals showed mixed performance. Gold prices rose slightly by 0.14% to $3,325.70 per troy ounce, maintaining above the $2,700 support level despite a strong U.S. dollar. Silver, platinum, and palladium data were not widely reported this week, but industrial metals faced headwinds due to impending tariffs. A 50% tariff on copper imports, effective August 1, was announced, potentially impacting companies reliant on the metal. Copper prices on the LME were not explicitly updated, but market sentiment suggests caution due to trade policy uncertainties. The gold market continues to benefit from its low correlation to risk assets and geopolitical stability, with analysts expecting it to test higher resistance levels if trade tensions persist.
Energy and Oil
Oil prices remained volatile amid geopolitical tensions and tariff concerns. Brent crude futures were not explicitly quoted this week, but June data indicated a 25% spike due to Middle East tensions, particularly the Israel-Iran conflict. This week’s market commentary suggests oil prices stabilized, with no significant de-escalation in hostilities reported. Natural gas spot prices at Henry Hub were not updated for this week, but earlier data showed a rise to $4.083/MMBtu in mid-January. International LNG futures prices for East Asia and the Netherlands’ TTF were also not updated, but prior trends indicated declines to $14.15/MMBtu and $14.00/MMBtu, respectively. Energy sector stocks, including Bitcoin miners and related assets, saw gains driven by a surge in Bitcoin prices to $113,734.64, up 21% year-to-date.
International Markets
European markets trended higher, with the STOXX Europe 600 Index gaining amid optimism about potential rate cuts. Specific index performance data was not available, but earlier trends showed a 2.37% rise. Japan’s Nikkei 225 and TOPIX indexes faced pressure from a stronger yen and tariff concerns, with no specific weekly performance reported. In China, the Shanghai Composite and CSI 300 indexes continued to benefit from economic recovery signals, though June’s Caixin Services PMI fell to 50.6, a nine-month low. The U.S.-Japan trade negotiations remain critical, with a 24% tariff on Japanese imports looming if no agreement is reached by August 1. China’s manufacturing PMI improved slightly to 49.7 in June, but services growth slowed, raising doubts about further stimulus.
Currencies
The U.S. dollar remained strong, trading near its highest level in over two years, supported by tariff-driven economic policies. The yen strengthened slightly, but specific exchange rates were not reported this week. Earlier data indicated the yen at JPY 155.6 against the dollar. Currency markets are expected to remain sensitive to U.S. tariff announcements and Federal Reserve policy signals.
Economic Indicators
- Jobless Claims: Initial claims fell to 227,000, with continuing claims at 1.965 million.
- Inflation: CPI steady at 2.35%, core CPI at 2.79% in May.
- GDP: Q1 2025 revised to -0.5% annualized.
- Retail Sales: Declined 0.9% in May, signaling consumer slowdown.
- Industrial Production: No specific update, but earlier data showed weakness in manufacturing.
- Unemployment Rate: Dropped to 4.1% in June.
- Existing Home Sales: Rose 0.8% month-over-month in June, with median prices near all-time highs.
- Consumer Sentiment: Conference Board’s index fell to 93.0 in June from 98.4 in May.
- Services PMI: Rose to 53.1 in June, indicating expansion.
- Manufacturing PMI: Held steady at 52.0 in June, signaling continued growth.
The Week Ahead
Key economic releases to watch include:
- U.S. Leading Economic Indicators for June
- Initial Jobless Claims for July 12
- Advance Retail Sales for June
- Consumer Sentiment (Preliminary) for July
- S&P Flash U.S. Services PMI for July
- S&P Flash U.S. Manufacturing PMI for July
- Producer Price Index (PPI) for June
- Industrial Production for June
These indicators will provide further insight into the U.S. economy’s trajectory amid tariff uncertainties and Federal Reserve policy expectations.
