Monthly Market Insights | June 2025

U.S. Markets

Stocks notched solid gains in May as investors cheered progress on trade deals and upbeat first-quarter corporate reports.

The Standard & Poor’s 500 Index gained 6.15 percent, while the Nasdaq Composite picked up 9.56 percent. The Dow Jones Industrial Average advanced 3.94 percent.1

If you don't like how things are, change it! You're not a tree. Jim Rohn, motivational speaker and entrepreneur

A Powerful Start

The month started out on an upswing, thanks to solid quarterly corporate reports from mega-cap tech companies. The S&P 500 ended a 9-day winning streak on May 5, its longest in 20 years. Stocks largely looked past a cautionary Fed statement following its two-day May meeting.2,3

Erased Year-to-Date Losses

In early May, the U.S. and China agreed to dial back some tariffs, sparking a powerful rally. Soft inflation data also helped push stock prices higher. By the end of the week, the S&P 500 had erased its year-to-date losses4.5

Trade Progress

Stocks came under slight pressure after credit rating agency Moody's downgraded the United States. But markets reversed course after Memorial Day weekend, rallying on news that the European Union had agreed to speed up trade talks with the U.S.6,7

After a well-received quarterly corporate report from a mega-cap AI chipmaker, a trade update unsettled investors. When trading ended, the S&P 500 finished out the strongest month of May in 30 years.8,9

Sector Scorecard

Ten of the 11 S&P 500 Index sectors finished the month in the green.10

Gains were concentrated in four sectors, which drove an outsized impact on overall S&P 500 returns: Technology (+9.97 percent), Industrials (+8.84 percent), Consumer Discretionary (+8.38 percent), and Communication Services (+6.24 percent).10

Six sectors advanced but underperformed the overall Index: Financials (+4.51 percent), Utilities (+3.83 percent), Materials (+2.92 percent), Energy (+1.28 percent), Consumer Staples (+1.22 percent), and Real Estate (+1.04 percent).10

Health Care (-5.57 percent) was the only losing sector in May.10

What Investors May Be Talking About in June

On June 9th, one of the world’s most influential tech companies kicks off its Worldwide Developers Conference (WWDC). Hundreds of thousands will attend online, with a much smaller group traveling to Cupertino, California, to attend in person.11

While it’s hosted by one company, WWDC has become a seminal event for the industry. Developers around the world can connect and watch more than 100 sessions, many of which are livestreamed. It’s also a key venue where insights into future trends for the whole industry are showcased.11

Expect AI to be a big focus. Most industry participants believe that AI still has considerable room to grow, and they will be evaluating opportunities during the five-day conference.11

World Markets

The MSCI EAFE Index rose 3.97 percent in May, its fifth consecutive winning month.12

In Europe, Italy (+6.60 percent), Spain (+6.51 percent), and Germany (+6.67 percent) posted solid gains. The United Kingdom (+3.24 percent) and France (+2.08 percent) also closed the month higher.12

Outside of Europe, Mexico picked up 2.81 percent while Brazil added 1.45 percent.12

Pacific Rim stocks also enjoyed a strong month. China’s Hang Seng Index tacked on 5.29 percent, while Korea’s KOSPI added 5.52 percent. Japan’s Nikkei rose 5.33 percent.12

Indicators

Gross Domestic Product (GDP)

The economy contracted at an annualized 0.2 percent rate in the first quarter of 2025, revised up from the initial estimate of a 0.3 percent contraction. The first decline in GDP since 2022 was caused mainly by a surge of imports ahead of tariffs taking effect, which drove up the trade deficit.13

Employment

Employers added 177,000 jobs in April, more than the 133,000 jobs economists were expecting. Unemployment was unchanged at 4.2 percent. Annualized wage growth was also unchanged in April from the prior month, holding steady at 3.8 percent.14

Retail Sales

In April, consumer spending rose 0.1 percent over the prior month. The modest rise exceeded market expectations. Year over year, retail sales rose 5.2 percent in April, matching March’s year-over-year rise.15

Industrial Production

Industrial output rose 1.5 percent in April, just missing market expectations of a 0.2 percent increase. An uptick in utilities offset declines in manufacturing and mining.16

Housing

Housing starts rose 1.6 percent in April over the prior month, which was slightly below expectations. High inventory and high mortgage rates continued to vex the housing market. Multifamily starts rose 11.1 percent while single-family starts fell 2.1 percent. Housing starts rose in the South and Northeast regions, but fell in the Midwest and the West.17

Sales of existing homes fell 0.5 percent month over month in April. Year over year, sales fell 2 percent, missing expectations of a 2.7 percent gain. The median existing home sales price was $414,000.18

New home sales rose 10.9 percent in April over the prior month, aided by builder incentives aimed at improving affordability. Year over year, new home sales rose by 3.3 percent. There were 504,000 unsold new homes on the market in April, equal to 8.1 months of supply at the current pace of sales.19

Consumer Price Index (CPI)

Consumer prices rose 0.2 percent in April over the prior month, in line with economists’ expectations. Year over year, prices rose 2.3 percent, slightly lower than the 2.4 percent expected. It was the lowest year-over-year rate since February 2021. Core inflation, which excludes volatile food and energy prices, rose 0.2 percent month over month and 2.8 percent year over year—slightly better than and in line with expectations, respectively.20

Durable Goods Orders

Orders of manufactured goods designed to last three years or longer declined 6.3 percent in April, which was better than expected.21

The Fed

At its early May meeting, the Federal Open Market Committee (FOMC) held the Fed funds rate at the 4.25 to 4.5 percent target range. The Fed cited uncertainty around trade and the need to balance its dual goals of two percent inflation and maximum employment.22

The Fed observed that economic growth and labor market conditions continued to be “solid” and that unemployment had “stabilized,” noting that inflation was still “somewhat elevated.”

The FOMC’s next scheduled meeting is June 17–18.

By the Numbers: Camping