The US equities market experienced a robust week from June 23 to June 27, 2025, with major indices reaching record closing highs. The S&P 500 gained 3.4% and the Nasdaq 4.2% for the week. The improvement was driven by the easing geopolitical tensions, with the ceasefire between Israel and Iran, coupled with renewed optimism surrounding US trade deals progress with China and the European Union.
New economic data was mixed, with strong consumer confidence, annual PCE inflation lower than expected, softer labor market numbers, and a revised first-quarter GDP report showing a sharper-than-initially-estimated contraction. This mix elevated hopes for Federal Reserve rate cuts starting as early as September this year, and drove Treasury bond yields 5 to 15bps lower.
The technology sector continued to be a key driver of gains, with renewed interest in the artificial intelligence trade. Announcements of tariff rollbacks and exemptions, particularly for high-demand tech devices, eased trade anxieties and brought back a strong demand for Mag-7 stocks as well.
For this week, new developments on a potential US-China trade deal, along with progress on trade with other partners, will be the main drivers of market sentiment. Attention is also increasing to Trump’s Tax Bill approval discussions in the Senate, with the Republican party leaders struggling to overcome internal conflicts while Democrats aim to exploit these divisions by offering potential amendments.
