June 30-July 4: The Week in Markets
Markets ended the week of June 27th on a strong note, extending a surprising rally despite heightened geopolitical tensions and ongoing central bank recalibration. The S&P 500 closed at a record high of 6,173.07 on June 27, 2025—the highest closing level on record.
The Federal Reserve left rates unchanged, as expected, but the messaging that followed marked a shift. Officials leaned hard into a “higher for longer” stance. Chair Powell emphasized that the Fed sees limited progress on disinflation in the services sector and flagged continued tightness in the labor market. The updated dot plot showed just one rate cut likely in 2025 down from the three cuts projected in March. Bond markets responded with modest upward pressure on front-end yields, though the move was relatively contained. The 2-year Treasury yield climbed to around 3.738%, reflecting a recalibration toward fewer rate cuts but stopping well short of the 5% levels seen earlier in the cycle. Equities took the shift in stride, suggesting markets were already leaning hawkish and remain more focused on tech and AI-led earnings optimism than on monetary policy for now.
Meanwhile, in the Middle East, the U.S. escalated its involvement with a high-profile strike on three Iranian nuclear facilities, deploying 14 bunker-buster bombs and accompanying missile fire. The administration initially described the mission as having “set back” Iran’s nuclear ambitions by years. However, later intelligence assessments indicated more modest outcomes pointing to partial evacuation of nuclear assets and damage limited to peripheral infrastructure. Analysts now estimate Iran’s program may have only been delayed by a few months.
Iran’s retaliation, a missile strike on Al Udeid Air Base in Qatar produced no casualties. The U.S. declared a ceasefire shortly. While Iran did not explicitly confirm direct agreement to the U.S.-brokered ceasefire in public statements, its actions and conditional statements implied adherence to the truce, particularly if Israel also ceased hostilities. However, both sides (Iran and Israel) accused each other of violating the ceasefire in the hours leading up to and just after its official enactment.
The S&P 500 Index finished the week up 2.89%, while the NASDAQ Composite Index (COMP) 3.27%, propelled by continued momentum in AI-related names and strong investor appetite for perceived secular growth amid cyclical uncertainty.
The Week Ahead (June 29–July 6): What We’re Watching
Tariff Risk Rising
The White House is expected to announce a broad 10% tariff on Chinese imports as soon as July 9. While that date technically falls the following week, any signal leaks, political trial balloons, or confirmation could surface in the coming days and shift positioning.
If imposed, the tariff would affect over $400 billion in goods and would likely hit consumer discretionary, industrials, and select semiconductors with high China exposure.
Earnings Season Teasers
We’re not yet into the heart of Q2 earnings, but a few early reporters could shape expectations. Most notable: Micron (MU) reports midweek, and investors will dissect forward guidance for insights into AI-related demand, China business conditions, and capex cycles.
Sentiments remain strong but brittle around semiconductor stocks.
June Jobs Report – Thursday, July 3
The June Total Nonfarm Employment report is due Friday. Consensus expectations sit around 200,000 jobs added. A strong print could reinforce the Fed’s delay on cut, and a weak print could push yields lower.
Also important: revisions to prior months and wage growth data, both of which carry heavy weight in the Fed’s reaction function.
