Unpredictable US customs policy
In May, the international stock markets were largely able to recover from the turbulence of the previous month and make gains, although US tariffs remained the dominant topic.
Initially, the US economy surprised with positive figures showing that there was no need to fear a sudden slowdown in growth: the unemployment rate (April) remained stable at 4.2%, over 177,000 new jobs were created in the manufacturing sector and the Purchasing Managers' Index (PMI) for services rose from 50.8 to 51.6 points in May, indicating rising economic activity. However, its counterpart for manufacturing fell to 48.5 (from 48.7) and has thus remained below the threshold value of 50, below which an economic contraction is expected, since March. In comparison, the Eurozone manufacturing PMI rose to 49.4 - a steady increase from 45.1 since December 2024 - while the Eurozone services PMI fell from 50.1 in April to 49.7 in May.
At the same time, positive rumors of "deals" between the US and individual other countries emerged in the tariff dispute. As if to confirm this, the USA and the UK announced such an agreement. Investors were also positively surprised by the announcement that the US tariffs on Chinese imports, which had been raised to 145% in the meantime, would be reduced to 30% for 90 days. This triggered a rally on the stock markets. This was additionally fueled by the US inflation rate, which reached 2.3% in April (the lowest level since February 2021) and was therefore lower than expected for the third time in a row.
From mid-May, however, the rally began to stutter: the independent rating agency Moody's downgraded the credit rating of US bonds from the highest rating of Aaa to Aa1. This triggered discussions about the sustainability of US government debt, which amounted to around USD 36 trillion at the end of 2024, corresponding to a debt ratio of around 122%. The policy pursued by US President Trump is based on further tax cuts, which are likely to put further pressure on the national budget.
Against this backdrop, yields on US bonds with longer maturities rose. Yields on 30-year US government bonds exceeded 5% for the first time and ended the month at 4.93%, 25 basis points higher than at the beginning of the month. The yield on 10-year US government bonds rose by 24 basis points to 4.40% in May. In comparison, the yield on their 10-year German counterparts remained stable with a slight increase of 6 basis points to 2.50%. The price of gold consolidated in an environment of rising interest rates. The price of a troy ounce remained virtually unchanged, rising by 0.02% or 3,289 US dollars.
In the last third of the month, Donald Trump announced that tariffs of 50% would be imposed on all imports from the EU from June 1, which immediately triggered a sell-off on the stock markets. The introduction of these tariffs was postponed until July 9 shortly afterwards. Shortly afterwards, the US International Trade Court overturned all import tariffs imposed by President Trump on the grounds that Trump did not have the right to "impose unlimited tariffs". This ruling in turn caused a brief rally until an appeals court overturned the ruling in favor of the US government and the tariffs remained in place - until further court decisions are made.
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