Weekly Market Recap: Inflation Eases, AI Stocks Waver, and Markets Hold Steady

Inflation Slows, Reviving Rate Cut Hopes

In a holiday-shortened week, U.S. markets exhibited modest gains as investors digested fresh inflation data and signs of a cooling labor market, bolstering hopes for a potential Federal Reserve rate cut later this year.

The Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred inflation gauge, rose 0.1% in April, bringing the year-over-year rate down to 2.1%, the lowest since September 2021. Core PCE, which excludes food and energy, also increased by 0.1% month-over-month, with the annual rate easing to 2.5% from 2.7% in March. Combined with softer jobless claims data, the market interpreted the figures as another step toward the Fed’s 2% inflation target.

Jobless Claims Tick Higher as Labor Market Cools

Initial jobless claims for the week ending May 24 rose by 14,000 to a seasonally adjusted 240,000, exceeding expectations of 230,000 and marking the highest level since August 2023. This uptick, while modest, adds to recent signs that the labor market may be gradually cooling and strengthens the argument for a more dovish Fed later this year.

Consumer Confidence Rebounds After 5-Month Slide

Consumer sentiment reversed course in May. The Conference Board’s Consumer Confidence Index climbed to 98.0 from 85.7 in April, ending a five-month decline. The Present Situation Index increased to 135.9, while the Expectations Index rose to 72.8, still below the threshold typically associated with recession risks but trending in a more positive direction.

Equities Grind Higher as Yields Ease

Equity markets ended the week slightly higher. The S&P 500 added roughly 0.2%, while the Nasdaq held near record levels, supported by continued investor appetite for tech. The Dow lagged, pulled lower by a rotation into defensive sectors. Meanwhile, the 10-year Treasury yield dipped to around 4.50% as traders reassessed the Fed’s path forward.

Nvidia Impresses, But the AI Rally Pauses

Nvidia made headlines again this week, reporting $44.1 billion in quarterly revenue, up 69% from the prior year and ahead of analyst expectations. However, after briefly topping the list as the world’s most valuable company, the stock gave back gains and closed the week slightly lower. The company warned it expects up to $8 billion in lost revenue due to tighter U.S. export restrictions to China.

Costco’s Earnings Highlight Consumer Resilience

Costco also reported earnings this week, beating estimates with $4.28 per share and $63.21 billion in quarterly revenue, up 8% from a year ago. While sales remain strong, the company noted ongoing pressure in key consumer staples categories, echoing concerns seen across the retail sector.

Crypto Pulls Back on Risk Sentiment Shift

In crypto markets, Bitcoin hovered near $104,600, while Ethereum traded around $2,578. Both assets saw modest pullbacks during the week, driven by shifting risk sentiment and ongoing regulatory uncertainty.

What’s Next: All Eyes on the Jobs Report

Looking ahead, all eyes turn to the May jobs report, set for release on Friday, June 6. A soft print may give the Fed more flexibility to cut rates in the second half of the year. Until then, investors appear content riding a soft-landing narrative while staying alert to data surprises.

Key Earnings to Watch – June 2025

Here’s a look at major U.S. companies reporting earnings this month, including sectors and key themes to watch.

Date	Company	Ticker	Sector	Notes
June 4	Lululemon	LULU	Consumer	Focus on margins and DTC sales
June 5	Broadcom	AVGO	Tech	AI-related semiconductor momentum
June 6	DocuSign	DOCU	Tech	Watch subscriber growth trends
June 11	Oracle	ORCL	Tech	Cloud revenue and GenAI commentary
June 12	Adobe	ADBE	Tech	Key barometer for software spending
June 13	Kroger	KR	Consumer	Grocery inflation & profit pressures
June 17	Lennar	LEN	Real Estate	Housing starts and mortgage rates
June 18	FedEx	FDX	Transportation	Macroeconomic demand trends
June 25	Micron	MU	Tech	DRAM pricing and AI demand
June 26	Nike	NKE	Consumer	International sales, China recovery