Weekly Market Commentary June 30, 2025

Economic data released last week painted a mixed picture of U.S. activity. The S&P Global Manufacturing Purchasing Managers’ Index (PMI) held steady at 52.0 in June, matching May’s 15-month high and signaling continued expansion. Factory output rose for the first time in four months, and employment in the sector grew at its fastest pace in a year. Meanwhile, the Services PMI rose to 53.1, indicating a stronger pace of growth in the services sector, driven by increased new business and improved demand conditions.

Consumer confidence fell more sharply than expected. The Conference Board’s index dropped to 93.0 in June from 98.4 in May, reflecting growing concerns about inflation, job security, and future income expectations. This suggests households are becoming more cautious heading into the second half of the year.

On the inflation front, the core Personal Consumption Expenditures (PCE) price index – the Fed’s preferred gauge – rose 0.2% month-over-month in May, with the annual rate holding at 3.4%, still well above the 2% target. Real GDP growth for Q1 was revised down to -0.5% annualized, largely due to stronger imports and inventory adjustments.

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