This week’s economic landscape was dominated by escalating trade frictions and weaker data.

Washington announced it will double tariffs on imported steel and aluminum to 50%, deepening tensions after China reportedly breached recent agreements. Manufacturing momentum softened as the Institute for Supply Management’s May Manufacturing PMI slipped into contraction at 48.5. Labor signals were mixed: the ADP survey recorded only 37,000 private-sector job additions—its slowest pace since March 2023 and far below the 130,000 consensus—while the JOLTS report indicated a larger-than-anticipated pool of open positions, hinting at lingering demand for workers even as headline indices weakened this week.

Looking ahead, inflation gauges will set the tone. The April 2025 CPI showed consumer prices rising 2.3 percent year-on-year, the coolest print since February 2021, yet economists expect May’s release to re-accelerate to 2.5 percent as higher import duties filter through. By contrast, the PPI is projected to ease, underscoring margin pressure at the producer level. The University of Michigan’s consumer-sentiment index is forecast to remain flat, reflecting households’ sensitivity to renewed price increases. Investors will also monitor ongoing tariff headlines and recent Treasury-yield volatility for additional market direction.

Given this economic backdrop, let us see how this impacts the performance of various investment strategies.