May was a sensational month for the U.S. stock market, with indices gaining strong momentum. So far, the market has surged by at least 3.19%. However, last week saw a sharp pullback, with the S&P 500 plunging over 2.68% before slightly recovering with a 0.37% rebound on Friday.
Now, with U.S. markets closed on Monday, May 26, in observance of Memorial Day, all eyes are on the key economic events lined up for the week as markets reopen.
Memorial Day, observed on the last Monday of May, is a federal holiday in the U.S. honoring military personnel who died while serving in the Armed Forces. While it’s a day of remembrance, it also marks the unofficial start of summer and a pause in trading activities.
The Conference Board Consumer Confidence Index gauges how optimistic consumers feel about the economy and job market.
A higher confidence reading generally signals economic strength and may attract capital toward traditional assets.
However, some studies suggest a negative correlation between consumer confidence and crypto performance.
The U.S. economy unexpectedly contracted in Q1 2025:
A key factor was a 41.3% surge in imports, triggered by Trump’s proposed tariffs, prompting businesses to stockpile goods.
A slowing GDP typically results in a risk-off environment, often bearish for cryptocurrencies.
Easing inflation reflected in lower PCE could open the door for rate cuts, which typically favor risk assets like crypto.
However, weak consumer sentiment might offset this optimism, keeping investors cautious.
With major key economic events scheduled this week, the crypto market could see heightened volatility:
Despite the holiday-shortened schedule, this week is packed with data that could move both the equity and crypto markets. From consumer confidence to inflation and GDP, every metric will shape investor behavior. For crypto traders, staying ahead of these updates will be critical to navigating potential price swings.
The annual US inflation rate (CPI) for the 12 months ending April 2025 was 2.3%, the lowest since February 2021.
Lower-than-expected CPI often signals potential rate cuts, favoring risk assets like crypto. Higher CPI can lead to a risk-off sentiment and weigh on prices.
The US economy is expected to see a significant slowdown in 2025, with GDP growth projected to be lower than in 2024.
Concerns include a Q1 2025 GDP contraction (-0.3%), the impact of tariffs on demand, and a potential slowdown in consumer spending and labor market momentum.
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