2025/05 Market Situational Awareness

May 2025 Market Snapshot: Decelerating Growth Reinforces Selectivity Across Assets

• Markets reflected a controlled growth deceleration with constructive risk tone. Equities posted modest gains despite softer macro momentum, supported by easing inflation pressures and stable financial conditions. Credit spreads remained contained, signaling confidence in balance-sheet resilience, while sector and regional dispersion increased as investors priced a slower, but orderly, economic glide path.

• Rates and FX aligned with late-cycle normalization dynamics. Treasury yields drifted lower at the margin, with curves modestly steepening as disinflation expectations firmed. The U.S. dollar softened, providing support to international and emerging market assets, while factor performance favored quality, dividend stability, and defensive growth over deep cyclicality.