Weekly Market Recap & What's Ahead - June 30, 2025
By Koen Hoorelbeke, Investment and Options Strategist
Market Overview
Global markets experienced record highs and a notable decline in volatility as tensions between the US and Iran eased, trade optimism increased, and expectations for Federal Reserve rate cuts strengthened. The technology sector outperformed, while energy and commodities lagged following a significant drop in oil prices. The cryptocurrency market stabilized due to institutional inflows, with investors now focusing on US jobs data, fiscal plans from Trump, and ongoing trade negotiations.
Equities Performance
United States
The S&P 500 reached a record high of 6,141, up 0.8% on June 27, driven by gains in technology and banking stocks, including Nvidia, Tesla, and AMD. Energy stocks lagged due to a 20% drop in oil prices.
Europe
European indices like the DAX and STOXX 50 also rallied, supported by defense and industrial sectors amid hopes for new trade deals and favorable ECB policies.
Asia
The Nikkei index hit a five-month high, buoyed by technology stocks, while Hong Kong and China remained steady. South Korea's KOSPI saw profit-taking after earlier gains.
United Kingdom
The FTSE 100 finished modestly higher, with strong performances from JD Sports and BAE Systems, although retail sentiment remained weak.
Volatility and Market Sentiment
Market volatility decreased significantly, with the VIX closing at 16.3, down from 19.8 at the start of the week. The demand for downside protection has lessened, indicating a more tranquil market environment, although major events could quickly change this sentiment.
Digital Assets
Bitcoin stabilized around $107,500, with institutional inflows continuing to support the market. BlackRock's IBIT ETF surpassed $70 billion in assets under management, while Ethereum and Ripple also saw renewed interest.
Fixed Income
US Treasury yields fell to multi-week lows as expectations for rate cuts grew. The 10-year yield reached 4.24% before rebounding slightly. In contrast, Germany's 10-year Bund yield rose, reflecting expectations of fiscal expansion.
Commodities
Commodities experienced sharp declines, with crude oil prices dropping 9.7% due to easing geopolitical risks. Grains also fell as favorable weather improved supply prospects, while gold prices decreased despite a weaker dollar.
Currencies
The US dollar weakened broadly, with the Japanese yen gaining strength. The euro briefly surpassed 1.17 against the dollar, while the Norwegian krone weakened due to oil price drops.
Key Takeaways
- Record highs for US and European equities, led by technology and defense sectors.
- Volatility decreased, with the VIX at 16.3.
- Bitcoin remained steady, with significant institutional inflows.
- US 10-year Treasury yield at 4.24%; German Bunds rose on stimulus expectations.
- Commodities, including oil and gold, saw significant declines.
- US dollar weakened, with notable movements in the yen and Canadian dollar.
Looking Ahead
Key events to watch for the week of June 30 to July 4, 2025, include the US jobs report, Trump’s fiscal policies, and major economic data releases. The upcoming week is expected to be eventful, with potential implications for market sentiment and direction.