General Market Analysis 06/01/25

US Markets Rally Into the Weekend – Nasdaq Up 1.7%

US stocks rallied on Friday, breaking a streak of five consecutive down days. Big tech stocks led the recovery, with the Nasdaq posting a strong 1.77% gain, the S&P 500 rising 1.26%, and the Dow adding 0.8% by the close. The dollar retreated from fresh highs, with the DXY slipping 0.29% to 108.90, while US Treasury yields continued to climb—both the 2-year and 1-year yields rose 3.9 basis points, closing at 4.279% and 4.598%, respectively. Oil prices jumped on increased demand driven by colder weather in the Northern Hemisphere and Chinese stimulus measures, with Brent up 0.90% to $76.61 and WTI rising 1.13% to $73.96 per barrel. Meanwhile, gold prices fell in relatively thin markets, dropping 0.66% to $2,639.19 an ounce.

Dollar Starts 2025 Strong

The US dollar has started the new year on a strong note, with the DXY climbing above 109.50 in the first trading days of 2025. Despite a dip on Friday, it posted a robust 0.85% gain for the week. Comments over the weekend from Federal Reserve officials signaled that the fight against inflation is far from over, likely providing further support for the greenback. This week’s major test for the dollar will be the first big employment data release of the year. Additionally, with the new US government taking office this month, heightened volatility for the dollar is expected. Much will depend on the implementation of proposed tariffs—delays could trigger a pullback, while swift action might propel the dollar to even higher levels.

Return to Normal Trading Conditions

Normal market conditions are expected to resume today after two weeks of holiday-dominated trading, with a return to key economic updates across major regions. The Asian session is quiet, but Euro traders will focus on German Preliminary CPI data, which will be released state by state throughout the London session. The New York session also has a light calendar, though markets may react to hawkish comments from Federal Reserve officials over the weekend. Additionally, the first US economic report of the week—Final Services PMI data—is scheduled for release.

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