Last week witnessed positive gains in the US stock market. The Dow Jones Industrial Average rose by 1.6% cumulatively, the S&P 500 increased by 1.88%, and the Nasdaq Composite Index rose by 2.01%. These gains were driven by positive signals in the US-EU trade negotiations and the US Court of International Trade’s temporary suspension of multiple tariff measures by the Trump administration, which significantly boosted market sentiment. In the just-passed month of May, all three major US stock indices recorded cumulative gains. Most of the gains occurred after the United States and the United Kingdom announced a preliminary trade agreement, with the Nasdaq index rising by nearly 10%.
International Oil Prices Decline Last Week
On the oil front, news that OPEC+ plans to significantly increase production in July has raised concerns among investors that crude oil will remain in a situation of oversupply for an extended period. As a result, international oil prices came under pressure and fell last week. The price of US crude oil futures dropped by 1.20% for the entire week, while the price of Brent crude oil futures fell by 1.36%.
International Gold Prices
In the precious metals market, the main contract of gold futures on the New York Mercantile Exchange declined slightly in May, with a drop of approximately 0.11%. However, since the beginning of this year, the international gold price has risen by approximately 25.5% cumulatively.
European Central Bank’s Interest Rate Decision This Week
Turning to this week, the European Central Bank (ECB) will announce its latest interest rate decision on Thursday local time, with President Lagarde holding a press conference. The market generally believes that as inflation in the eurozone continues to decline, the ECB is likely to announce a rate cut this week. If the ECB announces a rate cut, it will be the eighth rate cut by the ECB since June 2024.
However, at present, the market has generally lowered expectations for the ECB to cut interest rates again in July. With uncertainties in economic performance and inflation outlook, especially the threat of US tariff policies to the economic growth prospects of the eurozone, some ECB officials have strengthened the reasons for suspending subsequent easing policies, making it more difficult for the ECB to make monetary policy decisions.
US May Non-Farm Payroll Report and Federal Reserve’s “Beige Book”
The United States will release the May non-farm payroll report this Friday local time. Analysis predicts that the number of new non-farm jobs added in the US in May will drop significantly from 177,000 last month to 130,000, and the unemployment rate is expected to remain unchanged at 4.2%. The US job market may show signs of cooling. Due to the unexpectedly strong employment data last month, the market widely expects the Federal Reserve to postpone the interest rate cut from June to July. If the non-farm payroll data for May shows a significant decline, the probability of the Federal Reserve cutting interest rates in June may rise.
Additionally, on Wednesday local time, the Federal Reserve will release the latest survey report on the economic situation in the United States, also known as the “Beige Book.” This report, compiled based on the latest survey results of 12 regional reserve banks under the Federal Reserve, will further objectively reflect the impact of Trump’s tariff policy on the US economy. The Institute for Supply Management (ISM) of the United States will release the US non-manufacturing PMI (Purchasing Managers’ Index) for May on Wednesday.
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