The S&P 500 gave back about half of the previous weeks gains as it closed Friday at 5,802. On Monday the S&P 500 gapped down at the open in reaction to Moodys Ratings cutting the United States sovereign credit rating down one notch to Aa1 from Aaa (the highest). However, it clawed its way back and ran the streak to six straight daily gains. But from there the budget bill, federal deficit and rising interest rates took the spotlight. Remember, as interest rates rise it puts pressure on stocks, leading to lower prices. On Tuesday through Thursday we saw the 10-year Treasury note yield climbing to 4.63%, its highest level since 12 February. On the long end, the 30-year Treasury bond yield topped out at 5.15%, its highest level since 1 November 2023. Right in the middle was Wednesday as the S&P 500 had a daily loss greater than 1%. But as the markets dropped, we did see Bitcoin hit new all time highs on Tuesday through Thursday ($112,000). On Friday tariff talk about Apple and the European Union dominated the headlines, and the S&P 500 had another gap down at the open, never recovering. From a technical perspective we did see the S&P 500 breaking below that 5,800 support level at Fridays open, and we are once again in negative territory for 2025 YTD. For next week the markets are closed on Monday, followed by the Nvidia earnings report after Wednesdays close, and on the economic front we have Fed minutes, GDP 2nd quarter estimate and monthly core PCE price index. For TSP TIPS the TS-I fund made new record highs on Monday and Tuesday, and was just a penny short of another on Friday. It also remains at the top of the Performance Ranking leaderboard, followed by the C and S funds. As such, we recommend no changes to our current investment mix. That said, we still have one reallocation remaining in May. As such well look at market conditions and will push a new investment mix if needed on Thursday after the close for execution before noon on Friday 30 May.
The S&P 500 gave back about half of the previous weeks gains as it closed Friday at 5,802. On Monday the S&P 500 gapped down at the open in reaction to Moodys Ratings cutting the United States sovereign credit rating down one notch to Aa1 from Aaa (the highest). However, it clawed its way back and ran the streak to six straight daily gains. But from there the budget bill, federal deficit and rising interest rates took the spotlight. Remember, as interest rates rise it puts pressure on stocks, leading to lower prices. On Tuesday through Thursday we saw the 10-year Treasury note yield climbing to 4.63%, its highest level since 12 February. On the long end, the 30-year Treasury bond yield topped out at 5.15%, its highest level since 1 November 2023. Right in the middle was Wednesday as the S&P 500 had a daily loss greater than 1%. But as the markets dropped, we did see Bitcoin hit new all time highs on Tuesday through Thursday ($112,000). On Friday tariff talk about Apple and the European Union dominated the headlines, and the S&P 500 had another gap down at the open, never recovering. From a technical perspective we did see the S&P 500 breaking below that 5,800 support level at Fridays open, and we are once again in negative territory for 2025 YTD. For next week the markets are closed on Monday, followed by the Nvidia earnings report after Wednesdays close, and on the economic front we have Fed minutes, GDP 2nd quarter estimate and monthly core PCE price index. For TSP TIPS the TS-I fund made new record highs on Monday and Tuesday, and was just a penny short of another on Friday. It also remains at the top of the Performance Ranking leaderboard, followed by the C and S funds. As such, we recommend no changes to our current investment mix. That said, we still have one reallocation remaining in May. As such well look at market conditions and will push a new investment mix if needed on Thursday after the close for execution before noon on Friday 30 May.