Despite a raft of weak economic data recently, markets finished with a flurry on 6 June after the S&P 500 gained more than 2% and the small cap Russell 2000 index jumped more than 3%.

The market’s enthusiasm was sparked by a surprisingly resilient jobs report which showed the US economy added 139,000 jobs in May, higher than the 130,000 expected, while the unemployment rate held steady a 4.2%.

March and April saw a combined 95,000 downward revision which means employment has risen by an average of 126,000 per month so far in 2025. It paints a picture of a cooling, but crucially, not collapsing labour market.

That said, outside of recessions, the average monthly gain in the first five months of 2025 is the lowest in over the past 30 years according to the BLS (Bureau of Labour Statistics).

Furthermore, the current expansion is arguably long in the tooth, with May’s report marking the 53rd consecutive monthly gain, the second longest streak on record, according to the BLS.

Meanwhile, average hourly wage growth came in above forecasts at 0.4% which, combined with the decent jobs report, is likely keep the Federal Reserve from cutting rates. Futures markets now see the next rate cut in September 2025.

Bond markets sold off slightly after the jobs figures with the 10-year yield moving back up through 4.5% while the 30-year yield advanced to just under 5%.

Trade talks between the US and China are continuing and any breakthrough will probably be interpreted by investors as another TACO event (Trump Always Chickens Out).

Increased equity and bond market volatility brought about by Trump’s trade policies appears to be dampening risk appetite among institutional investors, suggesting much of the recent strength in equities has been driven by retail investor buying.

For example, the Financial Times reported that Goldman Sachs (GS:NYSE) has dialled back its risk taking, with chief operating officer John Waldron, describing it as ‘a sensible thing for us to do’.

‘Where we can, we pare back risk and stay a little bit closer to home,’ added Waldron, who is seen by some as the heir apparent to chief executive David Solomon.

While Goldman Sachs is not in the camp calling for a US recession, there are increasing worries among economists that the weight of tariff uncertainties will eventually take their toll on the labour market.

Referring to the May JOLTS (Job Openings and Labour Turnover Survey) report, Diane Swonk, chief economist at KPMG told CNN: ‘The labor market is revealing fragility. There is no margin for error when you’ve got a low pace of hiring, a low pace of quits.’

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