WEEKLY MARKET RECAP – MAY 23, 2025

All three major U.S. stock indexes declined by roughly 2.5% over the week, giving back momentum from the previous week’s strong rally. By Friday’s close, the S&P 500 was 5.6% below its all-time high set three months ago.

The yield on the 30-year U.S. Treasury bond rose above 5.00%, reaching its highest point since 2023, following the House’s approval of a budget bill projected to widen the federal deficit. Yields on shorter-term Treasuries also increased, though less sharply. The 30-year yield hasn’t stayed above the 5% mark for an extended period since 2007.

A six-day winning streak for the S&P 500 ended on Tuesday as optimism over a potential U.S.–China trade truce began to fade. Rising bond yields further dampened investor sentiment, leading the S&P 500 to a 1.6% drop on Wednesday and extending the week’s losses.

Gold prices rebounded strongly, climbing nearly 6% on the week to around $3,360 per ounce. The rally erased the prior week’s losses and continued a broader upward trend that recently saw gold set a new record above $3,400.

U.S. existing-home sales unexpectedly dipped in April despite the typical springtime increase in homebuying activity. According to the National Association of Realtors, sales fell 0.5% from March, marking the slowest April sales pace since 2009. Elevated mortgage rates and high prices continued to weigh on demand.

The U.S. dollar weakened, with its value against a basket of major global currencies falling to a four-week low on Friday. However, it remained above the three-year low reached on April 21. Year to date, the dollar was down nearly 9% as of Friday.

Investors are looking ahead to Friday’s release of the Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred measure of inflation. The most recent report showed inflation rising at a 2.3% annual rate in March, down from 2.7% in February, raising hopes that price pressures may be easing.