S&P 500 Weekly Update for June 30-July 3, 2025

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Weekly Update: June 23–27, 2025
Outlook for June 30–July 3, 2025
Market Performance (June 23–27):
Major Indexes: The S&P 500 and NASDAQ 100 hit all-time highs, with the Dow up 3.8%, NASDAQ up 4.2%, S&P 500 up 3.4%, and small caps up 3%. A strong week driven by incremental gains, with a notable surge in volume on Friday due to possible quarter-end window dressing.
Sectors: Growth sectors such as communication and technology (especially semiconductors) outperformed, while defensive sectors (real estate, staples, energy) lagged. Discretionary led with strong gains, but small and mid-caps remain negative year-to-date.
Key Drivers
Geopolitical Developments: A ceasefire between Israel and Iran, along with successful U.S. military actions, boosted market optimism. Geopolitical news was largely taken positively, despite initial negative reports. News taken as positive on tariffs and trade wars.
Economic Data: Mixed signals with weaker-than-expected economic reports, rising inflation (core PCE up), and declining personal income. However, the market shrugged off negative data, viewing it as "old news."
Monetary Policy: Fed Chair Jerome Powell maintained a "wait and see" stance on rate cuts. Fed Governor Bowman hinted at potential July cuts, boosting hopes for easier monetary policy (81.4% chance of unchanged rates on July 30; high probability of a 25-basis-point cut by September 17).
Earnings: Positive earnings reports supported gains, particularly in the Dow.
Market Dynamics: "Buy the dip" strategy remained active, pushing markets up despite low conviction and below-average volume earlier in the week.
Technical Analysis:
Trends: NASDAQ 100 showed a golden cross on the daily chart, with weekly trends improving. The S&P 500 has set four new highs so far in 2025, with large-cap growth (S&P 100, NASDAQ 100) leading. Small and mid-caps are improving but lagging.
Sentiment: Investor sentiment is improving but not extreme (VIX below 20, Goldman Sachs sentiment near positive). The market is climbing a "wall of worry" amid geopolitical concerns.
Breadth and Momentum: Market breadth is narrowing slightly, but new highs/new lows and advance/decline ratios are improving. Momentum indicators (e.g., RSI, PMO) are positive, with some nearing overbought levels.
Volume: Spiked on Friday, otherwise below average, indicating cautious conviction.
Economic and Market Context:
Inflation: Core PCE inflation ticked up, raising some concerns, but the market remains unperturbed, focusing on positive GDP forecasts for Q2 2025 to avoid recession signals.
Interest Rates: Yields are declining (10-year at 4.28%, below the critical 4.5% level), supporting equities.
Dollar: Continued weakness in the dollar is aiding stock market gains.
Commodities: Oil dropped 12% to the mid-60s, gold down 2.87%, silver stable, and copper up 5%, signaling economic strength.
Outlook for June 30–July 3, 2025:
Key Events:
Monday (June 30) is the last day of the month/quarter, potentially volatile due to rebalancing.
Employment report on July 3 (early due to July 4 market closure) could influence sentiment.
Ongoing Senate negotiations on a major bill (BBB), with a possible vote over the weekend, attempts being made to be signed by the president on July 4.
Seasonality: Early July historically positive (up 67% of the time, 3.4% average return for the month). The first half of July is the best-performing period since 1950.
Risks: Geopolitical tensions (e.g., Iran-Israel, U.S.-Canada tariff disputes) and inflation concerns could cause volatility. A potential slowdown in economic growth may prompt Fed rate cuts.
Growth sectors (tech, semiconductors, communication) and large caps may continue leading. Positive seasonality and declining yields support further upside, but low volume and overbought signals warrant caution.
Conclusion: The S&P 500 exhibited strong gains driven by growth stocks, positive geopolitical developments, and rate cut hopes, despite mixed economic data. The outlook for early July is cautiously optimistic, with positive seasonality and technical trends, but investors should monitor key events and potential overbought conditions.

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DISCLAIMER This video is for entertainment purposes only. I am not a financial adviser, and you should do your own research and go through your own thought process before investing in a position. Trading is risky!