Weekly Market Recap & What's Ahead - June 30, 2025

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 JPMorgan and Goldman Sachs. Notable performers included Nvidia (+4%), Tesla (+8.2%), and AMD (+6.8%), which contributed to a bullish sentiment amid easing geopolitical fears.

Europe

European markets also rallied, with the DAX up 0.64% and the STOXX 50 up 1.5%, led by defense and industrial sectors, buoyed by hopes for new trade deals and supportive ECB policies.

Asia

The Nikkei index rose 1.6%, reaching a five-month high, while Hong Kong and China markets remained steady. South Korea's KOSPI saw profit-taking after earlier gains.

United Kingdom

The FTSE 100 finished modestly higher at +0.7%, with strong performances from JD Sports (+6.6%) and BAE Systems (+3.8%). Defensive and mining shares performed well, 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, as most investors are rolling existing hedges. While current market conditions appear calm, investors are reminded that volatility can return swiftly.

Digital Assets

Bitcoin stabilized around $107,500, benefiting from broader risk asset recovery. Institutional inflows continued, with BlackRock’s IBIT ETF surpassing $70 billion in assets under management. Ethereum traded at $2,437, while Ripple gained renewed interest following recent court news. The mining sector is increasingly dominated by large operators.

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, while Germany’s 10-year Bund yield rose, reflecting anticipated fiscal expansion.

Commodities

Commodity prices dropped sharply, with crude oil losing 9.7% due to easing Middle East risks. Grains fell 5.2% on favorable weather conditions, while gold decreased by 2.2%. Traders are now closely monitoring developments in trade and OPEC+ news.

Currencies

The US dollar weakened broadly, with the Japanese yen being the strongest gainer as USDJPY fell below 144.00. The euro briefly surpassed 1.17, while the Norwegian krone weakened due to oil price declines, and the Canadian dollar gained strength following the scrapping of a digital tax.

Key Takeaways

• Record highs for US and European equities, led by technology and defense sectors.
• Volatility decreased, with the VIX at 16.3, making option protection cheaper.
• Bitcoin remained steady, with significant inflows into IBIT and ETHA.
• US 10-year yield at 4.24%, while Bund yields rose on stimulus expectations.
• Commodity prices fell sharply, particularly oil and gold.
• US dollar weakened, with notable movements in JPY and NOK.

Looking Ahead

Key events for the upcoming week include the US jobs report, which is crucial for rate cut expectations, and various corporate earnings announcements. The market will also be influenced by ongoing political developments, including Trump’s fiscal policies and tariff negotiations.