This Weekly Financial Markets Update reviews the top market headlines: Tariff Truce Boosts Markets, Inflation Hits Lowest Level Since 2021, Retail Sales Growth Eases
  • The U.S. and China agreed to reduce tariffs on each other's products for 90 days
  • The core CPI rose at a 2.8% annual rate in April
  • Retail sales rose 0.1% in April from March

Top Three Market Headlines

Tariff Truce Boosts Markets: The U.S. and China early last week announced a truce in their tariff battle that will see the countries significantly reduce, at least for a temporary period, the tariffs they had imposed on each other since April. According to the agreement, which will remain in place for 90 days while the countries work toward a broader trade deal, the U.S. will lower tariffs on most Chinese goods to 30% from 145%, while China will cut duties on U.S. products to 10% from 125%. Stock markets surged at the de-escalation, with the S&P 500 index surging 3.3% on Monday, May 12th in response to the news.

Inflation Hits Lowest Level Since 2021: The U.S. Department of Labor reported last week that the Consumer Price Index (CPI) increased 0.2% over the month of April. This put the year-over-year rise in the CPI at 2.3%, down from a pace of 2.4% in March and the smallest annual increase since February 2021. The biggest contribution to the index's rise in April was from the energy sector, which rose 0.7% on a monthly basis due to rising costs for natural gas and electricity. Food prices, on the other hand, fell 0.1%. The "core" CPI, which excludes food and energy items, rose 0.2% on the month and 2.8% on a year-over-year basis, holding steady with the year-over-year rate from March.

Retail Sales Growth Eases: The U.S. Census Bureau reported last week that sales at U.S. retail and food establishments edged 0.1% higher in April, slowing down from a 1.7% pace in March. A key cause for the deceleration was consumers pulling back on purchases after rushing to buy goods in March ahead of anticipated tariffs. Categories that saw declining sales in April after enjoying solid gains in March included automobiles, sporting goods & hobbies, clothing, general merchandise, and miscellaneous stores. Those declines were offset, however, by strength in other categories, including restaurants and building materials.

Please note: There will be no Weekly Financial Markets Update published next Monday, May 26 due to Memorial Day.

As of May 16, 2025 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World 4.05% 6.78% 5.37% 12.57%
S&P 500 5.33% 6.36% 1.81% 13.99%
Russell 2000 4.51% 5.19% -4.78% 2.21%
MSCI EAFE 0.94% 7.01% 14.35% 9.88%
MSCI Emerging Markets 3.09% 6.91% 10.04% 9.39%
FTSE NAREIT Equity 1.70% 0.12% 1.03% 11.41%
Bloomberg Commodity -1.68% -4.60% 3.87% 1.63%
Bloomberg U.S. Aggregate -0.19% -0.75% 2.01% 4.50%

US Census Bureau 5/15/2025, WSJ 5/12/2025, US Dept of Labor 5/13/2025. FactSet. Data from Morningstar Direct. Returns for periods greater than one year are annualized. Investment advisory, named and independent fiduciary services are offered through Gallagher Fiduciary Advisors, LLC, an SEC Registered Investment Adviser. Gallagher Fiduciary Advisors, LLC 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. Gallagher Fiduciary Advisors, LLC is a single- member, limited-liability company, with Gallagher Benefit Services, Inc. as its single member. Neither Arthur J. Gallagher & Co., Gallagher Fiduciary Advisors, LLC nor their affiliates provide accounting, legal or tax advice. The information provided cannot take into account all the various factors that may affect your particular situation, therefore you should consult your Gallagher Fiduciary Advisors consultant before acting upon any information or recommendation contained herein to discuss the suitability of the information/recommendation for your specific situation.