This Weekly Financial Markets Update reviews the top market headlines: Tepid May Jobs Report, ECB Cuts Rates as Fed Stays Put, Business Activity Surveys Show Contraction
  • The U.S. economy added 139,000 jobs added in May
  • The European Central Bank lowered its benchmark deposit rate by a quarter percentage point to 2.0%
  • The ISM Manufacturing Index registered 48.5% in May

Top Three Market Headlines

Tepid May Jobs Report: The U.S. Department of Labor reported last week that the U.S. economy added 139,000 jobs in May, exceeding economists' forecast of 130,000. At the same time, previously estimated gains for April and May were revised down by a total of 95,000. The average level of monthly gains over the past three months was 135,000. The unemployment rate on the month was steady at 4.2%. Sectors seeing the best job growth in May included health care, leisure and hospitality, and social assistance. The federal government continuing to shed jobs, losing 22,000 in May and 59,000 since January.

ECB Cuts Rates as Fed Stays Put: The European Central Bank last week reduced its key deposit rate to 2.0% from 2.25%, marking its eighth cut in a year as inflation approaches the bank's 2% target. ECB President Christine Lagarde signaled the central bank is nearing the end of its rate-cutting cycle, and markets are pricing in just one more reduction by year-end. The move deepens the ECB's divergence with the U.S. Federal Reserve, which hasn't cut rates since late 2024, creating a gap between the respective banks' policy rates exceeding two percentage points.

Business Activity Surveys Show Contraction: The Institute for Supply Management (ISM) reported last week that its ISM Manufacturing Index registered 48.5% in May, down marginally from 48.7% in April. This marked the third consecutive month the index was below the 50% threshold that differentiates expansion of business activity from contraction. May's reading reflected softness in new orders, employment, and production. Over in the services sector, ISM's Services Index dipped to 49.9% for the month, a decrease from 51.6% in April and the first sub-50% reading since June 2024.

As of June 06, 2025 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World 1.45% 8.28% 6.84% 13.68%
S&P 500 1.54% 7.20% 2.62% 13.62%
Russell 2000 3.23% 6.23% -3.84% 5.49%
MSCI EAFE 0.73% 10.16% 17.72% 12.65%
MSCI Emerging Markets 2.28% 8.05% 11.21% 12.96%
FTSE NAREIT Equity 0.46% -0.16% 0.75% 12.00%
Bloomberg Commodity 3.41% -2.13% 6.56% 4.59%
Bloomberg U.S. Aggregate -0.44% -0.76% 2.00% 3.69%

WSJ 6/5/25 ISM 6/2/25 & 6/4/25 The Bureau of Economic Analysis 5/31/2025, US Dep't of Labor, FactSet. Data from Morningstar Direct. Returns for periods greater than one year are annualized. Investment advisory services are offered by Gallagher Fiduciary Advisors, LLC ("GFA"), an SEC registered investment advisor that provides retirement, investment advisory, discretionary and independent fiduciary services. Registration as an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the SEC. GFA is a limited liability company with Gallagher Benefit Services, Inc. as its single member. GFA may pay referral fees or other remuneration to employees of Arthur J. Gallagher & Co. or its affiliates or to independent contractors; such payments do not change our fee. Neither Arthur J. Gallagher & Co., GFA, their affiliates nor representatives provide accounting, legal or tax advice. GFA does not express an investment opinion regarding any specific commodity, sector or individual security. Unless otherwise expressly noted, the contents of this communication do not constitute securities or investment advice, nor should this communication be construed as an opinion regarding the appropriateness of any investment. The information provided cannot take into account all the various factors that may affect your particular situation, therefore you should consult your GFA consultant before acting upon any information or recommendation contained herein to discuss the suitability of the information/recommendation for your specific situation.