Weekly Market Performance — May 2, 2025

Additional content provided by Brian Booe, Associate Analyst, Research

LPL Research provides its Weekly Market Performance for the week of April 28, 2025. U.S. stocks extended gains over the last five days, closing a historic month less than one percent below the flatline. Trade deal optimism continued to support equities and earnings season rolled on, while overseas, both European and Asian market gained ground in a holiday-shortened week. Treasury yields moved higher as Federal Reserve (Fed) rate cut bets were trimmed following strong economic data. In commodities, oil and gold both ended the week lower. 

Stock Index Performance

S&P 500 Index Sectors

Fixed Income and Commodities

Source: LPL Research, Bloomberg 05/02/25 @1:50 p.m. ET
Disclosures: Indexes are unmanaged and cannot be invested in directly.

U.S. and International Equities

U.S. Equities: Stocks built on last week’s gains, with the S&P 500 logging a nine-day winning streak and recouping April losses. The tech-heavy Nasdaq added over 3% while the S&P 500 and Dow both finished with solid gains well over 2%. Small caps also moved higher, closing in on erasing April’s decline. 

Trade headlines remained in focus, and major averages were supported by positive updates from U.S. officials around reprieve for auto parts and vehicles, and trade deals progressing well with the first batch reportedly set to be announced soon. Markets speculated on which trade partners would be first to finalize an agreement, and stocks were lifted further by positive remarks from Mexican President Sheinbaum after a conversation with President Trump late in the week. The most important trade spat player, China, continued to issue conflicting headlines compared to Washington, until China’s Commerce Ministry stated it is evaluating the possibility of trade talks on Friday. The update from Beijing, paired with the April jobs report indicating the labor market remains robust, powered a strong Friday advance to cap the week after investors shook off a lackluster first quarter economic growth update on Wednesday.  

A busy week for earnings reports also drew market attention, highlighted by more big tech results. Microsoft (MSFT) and Meta Platforms (META) cruised past Wall Street’s estimates Wednesday afternoon, while shares of Apple (AAPL) slipped despite topping earnings estimates Thursday evening, with focus landing on weaker China sales and tariff-related price cautions. Amazon (AMZN) dropped after offering a lackluster operating income forecast, indicating the e-commerce giant is bracing for a challenging environment. Nonetheless, artificial intelligence (AI) related takeaways remained upbeat, further supporting the AI secular growth theme.  

International Equities: European markets logged a solid weekly gain in an abbreviated week. The broader region recorded nine straight daily gains on the back of U.S. trade deal optimism, with local focus landing on the European Union (EU) reportedly preparing trade proposals, expected to lower trade barriers and boost investment in the U.S., among other items. Meanwhile, in a packed week for earnings, first quarter results arrived mostly better than expected, despite some misses from the auto sector. Mixed macro data was overshadowed by trade optimism, with highlights including better-than-forecast first quarter economic growth, April preliminary consumer inflation data for the Eurozone arriving hotter-than-expected, matching prior readings, while March unemployment data arrived in-line with the February print. 

Asian equities also printed a week-to-date advance amid a holiday-shortened week for most major markets. Easing U.S.-China trade tensions continued to support equities, although gains were slightly more measured. In local developments, Bank of Japan (BOJ) policymakers left rates unchanged, as expected, and downgraded economic projections for the 2025 and 2026 fiscal years. Elsewhere, tech shares were in focus, supported by Chinese chipmaker Huawei Technologies announcing it will begin testing a new chip, and on hopes a U.S.-China deal would benefit semiconductors. Taiwan led gains, with Hong Kong, Japan, and South Korea also closing higher, while mainland China edged lower to end a three-day trading week.

Fixed Income, Currency, and Commodity Markets

Fixed Income: The Bloomberg U.S. Aggregate Index traded lower this week, reversing early week gains as traders pared back Federal Reserve (Fed) rate cut bets following strong manufacturing and labor market data on Thursday and Friday. Both the rate-sensitive two-year yield and the 10-year yield traded eight basis points (0.08%) higher. 

Another focus in fixed income markets recently has been the so-called loss of American Exceptionalism and the risk of Treasury securities potentially losing their haven status. However, corporate credit markets have not experienced the same level of concern. Foreign buyers still hold nearly 30% of U.S. corporate credit and are an important source of demand. And while there is some evidence of modest selling from foreign buyers, we don’t see much evidence that foreign investor demand has materially weakened for USD-denominated corporate bonds. Foreign investors have steadily become a very important source of demand for U.S. corporate bonds, growing from about a 15% ownership share in 2000 to nearly 30% today, which is considerably higher than the 18% foreign ownership share of the U.S. equity market. In contrast to the Treasury market, where much of the foreign holdings are held by state entities like governments and central banks, the bulk of foreign demand for USD-denominated corporate credit tends to come from banks, insurance companies, and pension plans, especially from jurisdictions where the yield on local assets is low. And while yields, globally, have re-rated higher in recent years, the USD corporate bond market still offers among the highest yields for investment grade issuers along with the deepest and most liquid corporate bond market in the world. As such, demand remains robust.  

Commodities and Currencies: The Bloomberg Commodities Index ended the week lower, marking the second weekly decline for the broader commodities complex. West Texas Intermediate (WTI) crude shed over 7% this week as expectations for increased OPEC+ supply continued to weigh on prices. Saudi Arabia indicated it can tolerate lower prices and is considering pushing for more output at the next meeting, while growing production in non-OPEC nations also pressured prices. Sluggish Chinese demand was another a factor, offsetting threats of more U.S. sanctions. Gold also moved lower, nearing two-week lows, as easing trade tensions dampened haven asset demand and a drop in future delivery. The dollar edged higher after positive late-week updates from the economic calendar trimmed rate cut bets and indicated the U.S. economy remains on solid footing.   

Economic Weekly Roundup

177,000 Additions, Unemployment Unchanged.  Businesses added 177,000 to payrolls in April after adding a revised 185,000 the previous month. Downward revisions are common during periods of slowing growth. March estimates were revised down by 43,000. The three-month average gain in payrolls is 155,000, higher than what would be considered a neutral run-rate. Employment continued to trend up in health care, transportation and warehousing, and financial services. The percentage of long-term unemployed rose to 23.5%, potentially reversing a pre-pandemic trend. The inflation dynamic is likely pushing more to take multiple jobs. The gig economy makes it relatively easy for those interested in taking on more work. Federal payrolls fell by 26,000 since the beginning of the year, just shy of early 2024 levels. Employees on paid leave or receiving ongoing severance pay are counted as employed in the establishment survey. So, not much shedding yet. 

Despite the ongoing uncertainty with global trade, businesses were still adding to their payrolls in April. The economy has stable demand for workers in the healthcare sector and financial services. If the labor market holds up and the Trump administration walks back the most egregious tariffs, the economy could skirt a deep recession. 

Surge in Imports Depressed Q1 GDP Growth. Wednesday morning’s growth estimate was eerily like Q1 2022, during the height of supply chain problems. The report likely doesn’t provide much clarity about the growth trajectory, in our view. Growth in Q1 declined 0.3% annualized as net trade subtracted from growth. A spike in imported medical consumer goods, computers and peripherals subtracted almost five percentage points from Q1 economic growth. Consumer spending on services – especially health care – grew 2.4% in Q1 as households remained resilient (no recession here). Businesses pulled forward inventories in anticipation of unknown trade policy. The estimates of private inventory investment were based primarily on Census Bureau inventory book value data and a Bureau of Economic Analysis adjustment in March to account for a notable increase in imports. Real final sales to domestic purchasers rose 2.3% annualized, indicating the economy is holding steady outside of trade uncertainty. 

A successful resolution to global trade policy would likely remove most of the volatility and uncertainty currently experienced by businesses and consumers. Moreover, the consumer is too strong to speculate the economy has dipped into recession. Outside of the trade-induced shocks to business inventory management, the economy is holding up. However, trajectory for growth hinges on the health of the labor market. 

The Week Ahead

The following economic data is slated for the week ahead:    

• Monday: S&P Global U.S. Services PMI (Apr final), S&P Global U.S. Composite PMI (Apr final), ISM Services Index (Apr) 
• Tuesday: Trade Balance (Mar) 
• Wednesday: MBA Mortgage Applications (May 2), FOMC Rate Decision, Consumer Credit 
• Thursday: Nonfarm Productivity (1Q preliminary), Unit Labor Costs (1Q preliminary), Initial Jobless Claims (May 3), Continuing Claims (Apr 26), Wholesale Trade Sales (Mar), Wholesale Inventories (Mar final), New York Fed One-Year Inflation Expectations (Apr)  
• Friday: No economic releases scheduled