Highlights
U.S. stocks notched a second week of gains, marking the third positive week in five, as information technology stocks outperformed, due in part to upbeat sentiment around artificial intelligence (AI)-related stocks in the wake of several positive corporate earnings reports. That said, the honeymoon is over and there is a storm brewing in the Trump-Elon paradise, as the rift between the two widened in a public spat on social media. The escalating dispute between President Trump and Tesla CEO Elon Musk on Thursday sent the car maker to a marketvalue decline of around $152.4 billion, its biggest one-day slide on record. The stock recouped some 3.67% on the following day as tensions seemed to ease but investors continue to keep a watchful eye on the ripple effects of the fallout. Trade also remained a notable talking point during the week, with tensions between the U.S. and China continuing to re-escalate following social media comments from President Donald Trump at the end of the prior week. However, on Thursday, Trump and President Xi Jinping held a phone call that “resulted in a very positive conclusion for both countries,” according to a social media post from Trump, which gave investors some hope that the issues could be resolved. Across the big pond, the European Central Bank cut its key interest rate by 25bps to 2.15%, capping an eighth consecutive rate cutting cycle. President Christine Lagarde said that the ECB had “nearly concluded” the latest policy cycle while reiterating that the policy stance was in a “good place” and that rate setters were not on any “pre-set path” and would continue to be led by economic data. Her counterpart in the Bank of England, Governor Andrew Bailey, also maintained that the path for interest rates in the U.K. remained downwards but uncertainty remained on the pace and depth of the cuts. Separately, there was no apparent agreement in the bilateral trade talks between the U.S. and Japan, although the talks reinforced preparation for an agreement to potentially be announced in June at the Group of Seven (G7) summit.
Data Highlights
The Bank of Canada held its key interest rate steady at 2.75% which matched market expectation. Canada’s unemployment rate for May was reported at 7%, the highest since 2016. The Eurozone unemployment rate in April fell to 6.2%, from 6.3% in March. Inflation rate YoY in the Eurozone, eased to 1.9% in May from 2.2% a month earlier. This came in lower than market expectation of 2%. The European Central Bank reduced its key interest by 25 basis points to 2.15%, which matched analysts’ expectation. The Eurozone employment change Quarter on Quarter, changed by 0.2%. Lower than the analyst’s expectation of 0.3%. The Non-Farm Payroll in the U.S showed that 139k jobs were added in May 2025. This was higher than the market expectation of 130k. Australia’s GDP Year on year for Q1 grew by 1.3%. Lower than the 1.5% expectation by analysts.
Week Ahead
U.K Unemployment rate– Tuesday | U.S Consumer Price Index – Wednesday | U.K GDP, U.S Producer Price Index – Thursday.
