May 2025 market update

Trade talks, court rulings, and surprise tariff moves turned May into a geopolitical chess match. The global economy enters June on uncertain footing, with markets bracing.

June 6 2025

Introduction

Global equity markets ended higher over May as trade talks between major economies and the delay of tariffs against several economies lifted investor sentiment. The U.S. and China agreed to pause higher tariffs for 90 days, while the U.S. agreed to delay tariffs on the European Union (“EU”) as talks move forward. Near the end of the month, a U.S. court blocked the additional tariffs, requesting they be removed in 10 days. However, the U.S. Presidential Administration immediately appealed the decision. An appeals court temporarily removed the earlier ruling. Tariffs are still in place, but their legality is being considered by the court system. At the end of the month, U.S. President Donald Trump announced he would raise the tariff on aluminum and steel from 25% to 50% in early June.

The economic landscape remains uncertain. Trade negotiations are underway, but higher tariffs could be on the horizon if trade deals aren’t reached. Canada’s economy saw relatively robust growth in the first quarter, expanding by 2.2%, annualized. In the U.S., the economy contracted in the first quarter, largely owing to a surge in imports.

In Canada, the S&P/TSX Composite Index advanced, led by the Industrials sector. Canada’s main index reached a new record high closing price over the month. U.S. equities also gained in May. Government of Canada 10-year bond yields increased. U.S. Treasury bond yields also increased, due in part to Moody’s lowering its rating on U.S. government debt. Gold prices inched higher. The price of oil rose over the month.

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