Market Recap - Week of June 23 through June 27, 2025
- Gordon Achtermann, CFP®, CSRIC®, MBA
- Jul 1
- 3 min read
Updated: 7 days ago
Dear Friends,
The S&P 500 index rose 3.4% this week to new highs, led by the communication services and technology sectors.
The S&P 500 ended Friday's session at a record closing high of 6,173.10. The market benchmark also recorded a fresh intraday high during Friday's session at 6,187.68. With just one trading session remaining in June, the S&P 500 is now up 4.4% for the month and 5% for the year.
The gains came as the US and China confirmed details of a trade framework that would allow exports of rare earths and ease technology curbs. Under the agreement, Beijing will reportedly review and approve export applications for items subject to export control rules, while Washington will cancel various restrictive measures against China.
The US is also hopeful of wrapping trade discussions with more than 12 countries by the start of September, The Wall Street Journal reported Friday, citing Treasury Secretary Scott Bessent.
US stocks pared some of their gains on Friday afternoon after US President Donald Trump announced that the US was terminating trade discussions with Canada.
"These are very complex negotiations and we are going to continue them in the best interests of Canadians," Canadian Prime Minister Mark Carney said.
Just two sectors were in the red for the week: Energy fell 3.5% and real estate shed 0.8%.
The energy sector's drop came as crude oil futures also fell on the week amid continued turmoil in the Middle East.
Last Week’s Economic Reports
Consumer confidence declined to 93.0, down from 98.4 in the previous month.
June PMI (Purchasing Manager's Index) fell slightly, with the manufacturing component holding steady at 52.0 and the services component falling from 53.7 to 53.1. (What is PMI? LINK)
Headline Personal Consumption Expenditures (PCE) rose 0.1% in May, 2.3% y/y. PCE is the Fed's preferred measure of inflation.
S&P 500 Sector and Stylebox Returns
Thought of the week:
The budget reconciliation bill, currently winding its way to the president’s desk, includes many provisions that will have significant impacts on the economy for years to come. Central to the bill is the extension of personal tax cuts from the 2017 Tax Cuts and Jobs Act that were due to expire at the end of this year. The administration hopes to partially offset revenue losses from these and new tax cuts with environmental tax credit reforms and tariff revenues. However, the Congressional Budget Office (CBO) estimates that the House version of the bill passed in May would increase the federal deficit over the next 10 years by approximately $2.8 trillion.
In the chart of the week, the federal deficit as a percentage of GDP is projected out to 2032 using these estimates, while also incorporating the impact of tariff revenues and the assumption that the new tax cuts (like the old ones) will not expire. Regarding tariffs, we assume increases in the effective tariff rate of 4% for fiscal 2025 and 10% thereafter, relative to the baseline, and that nominal goods imports increase at a 3% annual rate throughout the forecast period. This results in a deficit/GDP ratio of between 6% and 7% from fiscal 2026 on, which would push the federal debt as a share of GDP to over 120% by 2032, from 98.2% at the end of fiscal 2024.
For investors, this rising level of debt means more Treasury issuance, which boosts yields but limits the potential for a Treasury rally to offset some future stock market slump. This underscores the need for broader sources of diversification, including alternatives, as the U.S. fiscal situation continues to worsen.
Source: JP Morgan
Up Next
Next week will be an abbreviated trading week, with the US stock market closing several hours early on Thursday and remaining closed on Friday for Independence Day.
However, investors will be watching closely on Thursday as the Labor Department releases its June employment report. Other data next week will include May construction spending on Tuesday and May factory orders on Thursday.
Want more? Here is a link to our latest Monthly Market Update webinar:
All the Best,
Gordon Achtermann, CFP®
703-573-7325
Your Best Path Financial Planning
