Market developments
Equities: The stock market is on track for its best start to a presidential term since Ronald Reagan’s in 1985, with the S&P 500 climbing 1.75% this week, nearing all-time highs. Meta Platforms announced a significant investment in AI, which positively influenced its stock price. Additionally, cryptocurrency-related stocks rallied due to Trump’s executive order supporting the industry.
Fixed income: The Federal Reserve is expected to maintain interest rates steady between 4.25% and 4.5% in the upcoming meeting next week, with market expectations leaning towards potential rate cuts later in the year. Overall, yields were relatively flat this week and bond prices closed a touch lower.
Commodities: Gold prices have surged close to record highs, driven by a weakened U.S. dollar and President Donald Trump’s less aggressive stance towards China. Gold increased 2.5% this week, reflecting strong haven demand. Analysts suggest that even if new tariffs are imposed by the U.S., gold could still benefit, as it often serves as a hedge against economic instability.