Weekly Market Performance — June 27, 2025

Markets Blog

David Matzko, LPL Research

LPL Research provides its Weekly Market Performance for the week of June 23, 2025. U.S. stocks printed a solid weekly advance, continuing to pad modest gains for the first half with just one trading session remaining. The S&P 500 climbed to fresh all-time highs Friday before paring gains after President Trump ended trade talks with Canada and threatened to impose new tariffs over the next seven days. Calming tensions in the Middle East and renewed artificial intelligence (AI) enthusiasm powered gains for domestic indexes. Meanwhile, international equities broadly gained ground with European markets eking out gains and Asian equities ending well in positive territory. Commodities dropped as the Iran-Israel ceasefire weighed on oil and gold prices, while Treasury bonds ended higher.

Index Performance

U.S. and International Equities

U.S. Equities: Major U.S. averages closed the last full week of the first half with strong gains, led by the technology-laden Nasdaq Index while the benchmark S&P 500 ended just shy of a fresh record high to end the week. Stocks opened the week with a muted reaction to Saturday’s U.S. strike on three Iranian nuclear development sites. However, Iran’s so-called symbolic counterattack was deemed by markets as not capable of spurring material economic repercussions and stocks bounced as focus turned to dovish-leaning remarks from Federal Reserve (Fed) officials. Risk appetite continued to improve following the U.S.-forged ceasefire deal, exacerbated by renewed AI enthusiasm and Micron Technology’s (MU) strong results, helping to fuel NVIDIA’s (NVDA) 4% jump to reclaim the title of world’s most valuable company.

Upside support through the latter half of the week was also credited to bolstered rate cut bets and retail buying, alongside volatility continuing to retreat. The S&P 500 continued its run toward record levels Friday after the Fed’s preferred inflation metric remained tame and Commerce Secretary Howard Lutnick stated the U.S. and China had reached an agreement. Lutnick and President Trump also stated additional trade deals are coming down the pike ahead of the July 9 deadline. However, stocks reversed Friday gains after the President stated he would end trade negotiations with Canada, threatening a fresh tariff rate for America’s northern neighbor within the next week.

International Equities: After paring back week-to-date gains, European equities closed higher on the back of a solid Friday session. U.S. airstrikes over the weekend dented risk sentiment on Monday, but stocks moved sharply higher following the U.S.-brokered ceasefire deal and reports that most European countries will agree to NATO’s defense spending target of 5% of gross domestic product (GDP). Among local developments, the U.K. underperformed on political dynamics as parliament considered watering down welfare reforms after over 100 Labour Party members opposed a proposal to cut disability benefits, aimed at saving around £5 billion and delivering on Prime Minister Keir Starmer’s campaign promise to reform the welfare system. Economic data highlights included a drop in Eurozone economic confidence in June and a tick higher for consumer inflation in France and Spain.

Asian markets traded higher over the last five days, capping the best week for the broader region in two months. The tech-heavy exchanges of Japan were among the week’s biggest outperformers, garnering support from tech enthusiasm and Nasdaq outperformance in New York. Japan’s fellow tech-leaning market of Taiwan also posted a solid gain on the back of semiconductor names, while South Korea ended with more measured gains as one of the globe’s hottest rallies eased a bit after MSCI retained the country’s emerging market (EM) status. Hong Kong extended last week’s winning streak, supported by fresh consumption support measures from the People’s Bank of China (PBOC), before snapping five straight days of gains on Thursday and Friday. Mainland China also climbed higher on the week.

Fixed Income, Currency, and Commodity Markets

Fixed Income: The Bloomberg U.S. Aggregate Index traded higher this week. The monetary policy rate-sensitive two-year yield and the 10-year yield ended roughly 17 and nine basis points lower, respectively.

During congressional testimony this week, Fed Chair Powell reiterated the Federal Open Market Committee (FOMC) is in no rush to cut rates, which was consistent with the messaging coming out of last week’s Fed meeting. Powell noted that the economy is still strong, and the Committee, according to their forecasts, expects inflation pressures to reaccelerate over the coming months due to tariffs. For a Fed that has historically been data-dependent (according to Grok AI, the Fed has said they were data-dependent at least 40–50 times since 2022), the reliance on forecasts is in contrast to the actual data that suggests that the Fed should be cutting rates — something Powell acknowledged in his testimony yesterday. Verily, four months of falling inflationary data suggesting price increases have slowed, and the Bloomberg Economic Surprise Index is at its lowest level since last September (which caused the Fed to begin its rate-cutting campaign with a 0.50% rate cut). Moreover, market-implied inflation expectations, either through TIPS breakevens or inflation swaps, are not pricing in the risks of inflation reaccelerating. Markets are currently pricing in two full cuts this year, but if the inflation data doesn’t worsen over the next few months and/or the labor market weakens in line with expectations, markets could begin to price in more rate cuts, which would be a tailwind for bond prices. And if the inflation data doesn’t worsen over the next few months, the credibility of this Fed could be further damaged, especially since it was late to raise rates due to its forecasts of transitory inflation in 2022.

Commodities and Currencies: The broader commodities complex traded lower this week, weighed down by a hefty slide in crude oil prices. West Texas Intermediate (WTI) crude oil dropped over 12% as the Israel-Iran ceasefire held and the Strait of Hormuz remained clear of Iranian blockages throughout the conflict. Although fears of supply disruptions may have eased, going forward, oil prices are likely to garner support from inventories near 11-year seasonal lows amid rising demand throughout the U.S. summer driving season, while a weaker dollar makes crude cheaper and more attractive for foreign buyers. The greenback dropped near three-year lows as traders increased wagers on Fed rate cuts starting soon, plus a potential third cut arriving before the end of the year. Pressures from across the pond also continued to weigh on the dollar as European Central Bank (ECB) rate cut expectations waned following an uptick in consumer prices in France and Spain, bolstering Europe’s shared currency and sending the dollar to its weakest level against the euro since 2021. Gold extended losses into a second week on easing geopolitical tensions and an improving trade outlook. Silver prices steadied, while platinum and copper rose.

Economic Weekly Roundup

The latter half of the week featured relatively full slates of economic data highlighted by the final revisions to first quarter growth data and the latest Personal Consumption Expenditures (PCE) results. Thursday’s batch of data included slightly weaker-than-forecast annualized GDP data, arriving with a 0.5% decline compared to the forecasted 0.2% contraction, dragged down by the slowest consumer spending result since the onset of the COVID-19 pandemic. Among monthly data, the trade deficit widened more than expected last month due to a decline in exports. However, durable goods orders nearly doubled estimates, potentially offsetting the GDP implications of a steeper trade deficit. Market reactions were tepid following the data, with investors shrugging off the nearly “ancient history” data from the first quarter as focus landed on tech strength in stocks and Fed Chair successor and rate cut bet headlines in the bond market.

PCE data capped the week, with headline data arriving in-line with estimates and core results (which exclude volatile energy and food prices) remained tepid with just a 0.1% increase on both a monthly and annual basis, consistent with tame price pressures. Meanwhile, separate reports from the Bureau of Economic Analysis on Friday indicated personal income and personal spending declined in May.

The Week Ahead

The following economic data is slated for the week ahead:

• Monday: MNI Chicago PMI (June), Dallas Fed Manufacturing Activity (Jun)

• Tuesday: S&P Global U.S. Manufacturing PMI (Jun final), ISM Manufacturing report (Jun), Construction Spending (May), JOLTS Job Openings report (May), Dallas Fed Services Activity (Jun), Wards Total Vehicle Sales (Jun)

• Wednesday: MBA Mortgage Applications (Jun 27), Challenger Job Cuts (Jun), ADP Employment Change (Jun)

• Thursday: Trade Balance (May), Change in Nonfarm, Private, and Manufacturing Payrolls (Jun), Unemployment Rate (Jun), Labor Force Participation Rate (Jun), Underemployment Rate (Jun), Average Hourly Earnings (Jun), Average Weekly Hours All Employees (Jun), Initial Jobless Claims (Jun 28), Continuing Claims (Jun 21), S&P Global U.S. Services and Composite PMI (Jun final), Factory Orders (May), ISM Services Index (Jun), Durable Goods Orders (May final), Capital Goods Orders and Shipments (May final)

• Friday: Independence Day holiday, no economic releases scheduled

IMPORTANT DISCLOSURES

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors. To determine which investment(s) may be appropriate for you, please consult your financial professional prior to investing.

Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk.

Indexes are unmanaged and cannot be invested into directly. Index performance is not indicative of the performance of any investment and does not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

This material was prepared by LPL Financial, LLC. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

Unless otherwise stated LPL Financial and the third party persons and firms mentioned are not affiliates of each other and make no representation with respect to each other. Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services.

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The fast price swings of commodities will result in significant volatility in an investor's holdings.

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