This Weekly Financial Markets Update reviews the top market headlines: Federal Reserve Leaves Target Rate Unchanged, Job Gains Decelerate in April, Business Surveys Signify Contraction in April.

Top Three Market Headlines

Federal Reserve Leaves Target Rate Unchanged: The Federal Reserve voted last week to keep the target range for its interest rate policy benchmark, the federal funds rate, at 5.25% to 5.50%. This marked the sixth straight meeting since July of 2023 at which the central bank left the target range unchanged. Officials maintained their stance that it would not be appropriate to reduce the target range until they have gained greater confidence that inflation is moving "sustainably toward 2 percent." In light of recent inflation reports that were higher than expected, Jerome Powell said in an accompanying press conference that "it is likely that gaining such greater confidence will take longer than previously expected."

Job Gains Decelerate in April: The Labor Department reported last week that 175,000 new U.S. jobs were created in April, down from 315,000 in March. The April gains were below economists' estimate of 240,000 and the lowest monthly tally in six months. The total number of additions over the prior two months was also revised down by 22,000. Industries seeing the most gains in April were health care, social assistance, and transportation & warehousing. The unemployment rate ticked up to 3.9% from 3.8% in March, while average hourly earnings rose 3.9% from a year ago, the slowest annual pace since May of 2021.

Business Surveys Signify Contraction in April: Business activity edged lower across the U.S. economy in April, according to surveys of business managers conducted by The Institute for Supply Management (ISM). The ISM Services Index declined from 51.4% in March to 49.4% in April, the first time since December 2022 the reading fell below the 50% threshold that differentiates expansion of business activity from contraction. Similarly, the ISM Manufacturing Index sank below 50% with a reading of 49.2% for April, down from 50.3% in March and the 17th out of the last 18 months it has been in contraction territory.

As of May 06, 2024 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World 0.95% -1.66% 6.40% 21.05%
S&P 500 0.56% -2.32% 7.99% 27.32%
Russell 2000 1.71% -4.11% 0.85% 18.87%
MSCI EAFE 1.63% -1.27% 4.44% 10.90%
MSCI Emerging Markets 2.03% 2.02% 4.43% 12.43%
FTSE NAREIT Equity 1.43% -5.12% -5.31% -6.46%
Bloomberg Commodity -1.43% 2.40% 4.64% 5.32%
Barclays U.S. Aggregate 1.17% -1.29% -2.06% -0.66%