Quick Take: Stocks hit new record highs in June, while bonds had their best month since February as traders factored in two rate cuts by the end of this year. [1],[2]
Source: https://www.bloomberg.com/news/articles/2025-06-29/us-futures-edge-higher-as-trade-talks-continue-markets-wrap
Stocks registered a powerful advance in June, ending the month at record highs.[3] As investors felt more confident that trade deals were in the pipeline and hopes rose for interest rate cuts, the second quarter turned out to be the best for equities in more than a year.[4]
Source: https://www.wsj.com/finance/stocks/global-stocks-markets-dow-news-06-30-2025-52905785?mod=finance_lead_story
The S&P 500 rose 4.96% in June, which puts the index up 5.5% for the year.[5] To say it’s been a rocky road might be an understatement. Having dropped 4.59% in the first quarter, the S&P 500 gained 10.57% in the second, completing a stunning 24.5% advance from its April 8 low.[6] Stocks have come back from the brink of a bear market to set all-time highs for both the S&P 500 and Nasdaq, as investors cheered economic resilience from robust corporate earnings and solid economic data.[7]
Cross Asset Rally
Source: https://finance.yahoo.com/news/wall-street-booming-june-big-204422943.html
The rally was broad-based, as assets ranging from stocks to commodities to bonds joined in the advance. Early in June, oil markets spiked briefly on fears of a broader conflict in the Middle East following a military exchange between Iran and Israel. [8] Prices quickly fell again after a ceasefire was brokered by U.S. and regional diplomats.[9]
Source: https://finance.yahoo.com/news/treasuries-slip-investors-breather-fed-101954651.html
Treasury bonds had their best month since February, amid expectations the Federal Reserve (“Fed”) may cut rates twice this year.[10] A key index of US government debt returned 0.9% on the month, continuing a positive trend this year.[11] In fact, the first half has been the best for corporate bonds in five years, despite concerns ranging from tariffs, the policy outlook, and Moody’s downgrade of the US credit rating.[12]
Treasuries also likely saw a boost from speculation that the administration will name a more dovish Fed chairman who supports earlier rate cuts.[13] Current Fed chair Jerome Powell’s term as the chair ends in May of 2026, though the administration has been calling for his resignation.[14] To cut rates, Fed officials will probably want to see weaker labor markets or strong evidence of minimal tariff-related price increases.[15] The administration blasted June’s widely anticipated Fed rate decision, where they held rates steady and will likely remain at least until September.[16]
Policy: Reduced Trade Uncertainty and Tax Bill
Although the end of the 90-day tariff pause was expected to occur on July 9th, it appears that negotiations remain ongoing, and the U.S. seems to be taking a more flexible approach to tariffs.[17]
In late June, the U.S. and China reportedly signed a trade deal affirming the truce that had first been reached in May.[18] The truce had initially faltered after disagreements over
Chinese rare earth exports and U.S. export controls. Commerce Secretary Howard Lutnick reported that the signed deal includes a commitment from China to deliver rare earth minerals. [19]
Lutnick indicated that the U.S. will complete deals with several countries and then send letters to other countries dictating trade terms if agreements aren’t reached in time.[20] Deadlines may also be extended to allow for continued talks.
Source: https://www.blackrock.com/us/individual/insights/blackrock-investment-institute/weekly-commentary
Although the current effective tariff rate of 15% is still the highest since the 1930s, we’re unlikely to see a return to April’s maximal tariffs, leaving trade uncertainty now well below April’s highs.[21] The ongoing impact of tariffs remains to be seen, as inventories have dropped and recent inflation data has shown an uptick.[22]
While trade negotiations eased investor anxiety, progress on the administration’s sweeping domestic policy also provided a source of optimism.[23] Congress ultimately passed the “One Big Beautiful Bill” legislation that extends the tax cuts from the 2017 Tax Cuts and Jobs Act, adding new corporate tax incentives aimed at stimulating investment. Notably, negotiations among the G7 countries also resulted in an exemption for U.S. multinational companies from the group’s new minimum corporate tax rates.[24] This offers support to U.S. companies operating internationally.
Although the proposed tax cuts and incentives could boost consumer spending and business investment, these effects may not fully materialize before early 2026.[25]
Soft Data Stabilizing
We’ve previously discussed the weakening of soft data, for example, from souring consumer confidence. As opposed to hard data that provide more objective measurements of economic activity, soft data are based on opinions, expectations, measured in surveys. Heading into the second half of 2025, the divergence between sentiment indicators and hard economic data is also narrowing.[26]
For example, soft survey data from the U.S. Conference Board Consumer Confidence Index and the Philadelphia Fed Manufacturing Index show signs of stabilization.[27] Meanwhile, the hard data still shows that the U.S. economy remains in a good place.[28]
Looking Ahead
Earnings season kicks off around mid-July, and traders see virtually no chance of a rate cut at the Fed’s July meeting.[29] While growth ahead is likely to slow, the next few months will tell us if policy uncertainty will translate into tangible impact on jobs, spending, investment, and corporate profits.[30] All things considered, U.S. assets have remained attractive as earnings forecasts remain more than what’s expected internationally, and multinational companies will benefit from a weaker dollar.[31]
Markets have been anything but quiet during the first half of 2025, with headlines and sentiment often pulling prices in different directions. Despite the noise, we remain focused on what matters most — your financial wellbeing over the long run.
As summer kicks into full gear, we hope you avoid the heat and enjoy a restful season. If recent volatility has raised questions or if your situation has changed, we invite you to reach out. Now is a great time to schedule a mid-year review call, zoom, or in-person meeting. We’re here to help you stay the course, no matter the weather.
The information expressed herein are those of JSF Financial, LLC, it does not necessarily reflect the views of NewEdge Securities, LLC. Neither JSF Financial LLC nor NewEdge Securities, LLC gives tax or legal advice. All opinions are subject to change without notice. Neither the information provided, nor any opinion expressed constitutes a solicitation or recommendation for the purchase, sale or holding of any security. Investing involves risk, including possible loss of principal. Indexes are unmanaged and cannot be invested in directly.
Historical data shown represents past performance and does not guarantee comparable future results. The information and statistical data contained herein were obtained from sources believed to be reliable but in no way are guaranteed by JSF Financial, LLC or NewEdge Securities, LLC as to accuracy or completeness. The information provided is not intended to be a complete analysis of every material fact respecting any strategy. The examples presented do not take into consideration commissions, tax implications, or other transactions costs, which may significantly affect the economic consequences of a given strategy. Diversification does not ensure a profit or guarantee against loss. Carefully consider the investment objectives, risks, charges and expenses of the trades referenced in this material before investing.
Asset Allocation and Diversification do not guarantee a profit or protect against a loss.
The Bloomberg Barclays U.S. Aggregate Bond Index measures the investment-grade U.S. dollar-denominated, fixed-rate taxable bond market and includes Treasury securities, government-related and corporate securities, mortgage-backed securities, asset-backed securities and commercial mortgage-backed securities.
The S&P 500 Index is an unmanaged, market value-weighted index of 500 stocks generally representative of the broad stock market.
TLT-iShares 20 Plus Year Treasury Bond ETF seeks to track the investment results of an index composed of US Treasury bonds with remaining maturities greater than twenty years.
The CBOE Volatility Index (VIX) is a real-time index that represents the market’s expectations for the relative strength of near-term price changes of the S&P 500 Index (SPX). Because it is derived from the prices of SPX index options with near-term expiration dates, it generates a 30-day forward projection of volatility. Volatility, or how fast prices change, is often seen as a way to gauge market sentiment, and in particular the degree of fear among market participants.
The Nasdaq Composite is a market-capitalization-weighted index consisting of all Nasdaq Stock Exchange listed stocks that are not derivatives, preferred shares, funds, exchange-traded funds or debenture securities.
Treasury Bond- is a U.S. government debt security with a fixed interest rate and maturity between two and 10 years.
Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced in a specific time period. GDP is the most commonly used measure of economic activity.
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[1] https://www.reuters.com/business/sp-500-nasdaq-futures-climb-record-highs-trade-optimism-2025-06-30/
[2] https://finance.yahoo.com/news/bond-traders-basking-gains-bet-003024893.html
[3] https://www.reuters.com/business/sp-500-nasdaq-futures-climb-record-highs-trade-optimism-2025-06-30/
[4] https://www.reuters.com/business/sp-500-nasdaq-futures-climb-record-highs-trade-optimism-2025-06-30/
[5] https://edition.cnn.com/2025/06/30/investing/us-stock-market
[6] https://edition.cnn.com/2025/06/30/investing/us-stock-market
[7] https://www.wsj.com/finance/stocks/global-stocks-markets-dow-news-06-30-2025-52905785
[8] https://www.bloomberg.com/news/articles/2025-06-12/latest-oil-market-news-and-analysis-for-june-13
[9] https://www.reuters.com/business/energy/us-crude-oil-futures-fall-over-3-trump-announces-israel-iran-ceasefire-2025-06-23/
[10] https://finance.yahoo.com/news/bond-traders-basking-gains-bet-003024893.html
[11] https://finance.yahoo.com/news/bond-traders-basking-gains-bet-003024893.html
[12] https://finance.yahoo.com/news/bond-traders-basking-gains-bet-003024893.html
[13]https://finance.yahoo.com/news/treasuries-slip-investors-breather-fed-101954651.html
[14] https://finance.yahoo.com/news/trump-feds-powell-should-resign-immediately-111529874.html
[15] https://www.wsj.com/economy/central-banking/fed-holds-rates-steady-and-keeps-door-open-to-cuts-5d523f9f
[16] https://finance.yahoo.com/news/trump-feds-powell-should-resign-immediately-111529874.html
[17] https://www.cnbc.com/2025/06/27/deep-inside-economy-more-sticker-prices-start-to-go-up-due-to-tariffs.html
[18] https://www.ft.com/content/a86da19b-65f0-4e0f-8989-c9ac2b61c46a
[19] https://www.ft.com/content/a86da19b-65f0-4e0f-8989-c9ac2b61c46a
[20] https://sg.finance.yahoo.com/news/lutnick-says-us-china-trade-165923965.html
[21] https://www.blackrock.com/corporate/literature/market-commentary/weekly-investment-commentary-en-us-20250630-tariff-and-tax-policy-back-center-stage.pdf
[22] https://www.cnbc.com/2025/06/27/deep-inside-economy-more-sticker-prices-start-to-go-up-due-to-tariffs.html
[23] https://www.cnn.com/politics/live-news/trump-big-beautiful-bill-house-vote-07-03-25
[24] https://www.blackrock.com/corporate/literature/market-commentary/weekly-investment-commentary-en-us-20250630-tariff-and-tax-policy-back-center-stage.pdf
[25] https://am.gs.com/en-us/advisors/insights/article/asset-management-mid-year-outlook
[26] https://am.gs.com/en-us/advisors/insights/article/asset-management-mid-year-outlook
[27] https://am.gs.com/en-us/advisors/insights/article/asset-management-mid-year-outlook
[28] https://www.newyorkfed.org/newsevents/speeches/2025/wil250624
[29] https://finance.yahoo.com/news/july-rate-cut-from-fed-is-now-completely-off-the-table-following-solid-jobs-report-141432543.html
[30] https://am.gs.com/en-us/advisors/insights/article/asset-management-mid-year-outlook
[31] https://www.morganstanley.com/insights/articles/investment-outlook-midyear-2025
