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June 30, 2025

Beacon Weekly Investment Insights 6.30.25

Portfolio Manager, Matthew Kelly, provides insights to guide you through changing market conditions. Please read the full text below or download the PDF version.

It was an action-packed week for the broader markets, with plenty of attention-grabbing headlines for investors to sift through and absorb. Uncertainty in the Middle East loomed as the opening bell rang on Monday morning and continued throughout the trading session - as it was reported that Iran had launched a retaliatory attack on a US Air Base in Qatar but these fears were quelled rather quickly – with Qatar’s air defense system thwarting the attack, resulting in minimal damage. Later that evening, President Trump announced a ceasefire agreement between Israel and Iran, effectively putting an end to the conflict that abruptly began on June 13th. On a separate note, we also received some unexpected news on the trade front later in the week, with the US and China agreeing to ease technological and rare earth restrictions that were previously in question. Conversely, President Trump made comments late Friday afternoon that signified his administration will temporarily be ending trade talks with Canada, after they decided to levy a digital services tax on US-based firms. Canada’s government subsequently announced over the weekend that the digital services tax will be eliminated, with Canada’s Prime Minister Mark Carney and President Trump agreeing to resume discussions and aiming to finish a deal by July 21st.

From a macroeconomic standpoint, there were a handful of important economic releases that hit the tape, chiefly: new/existing home sales, consumer confidence, initial jobless claims, and the Fed’s preferred measure of inflation (PCE) or personal consumption expenditures. The May housing data was mixed - with existing home sales beating expectations as supply opened up (annualized rate of 4.03 million units, in comparison to expectations of 3.9 million units), whereas new homes sales missed the mark (annual rate of 623,000 versus 695,000 expected). Meanwhile, consumer confidence gave up a little ground during June after a welcome rebound the month prior - with respondents becoming less enthusiastic about future job prospects and overall business conditions (monthly reading fell from 98 to 93). The number of initial jobless claims continued to affirm a healthy labor market though, clocking in at 236,000 vs. the consensus estimate of 244,000. Lastly, the Fed’s preferred inflation gauge came in slightly higher than expected, with the annual Core PCE reading reflecting 2.7%, compared to expectations of 2.6%.

The above-mentioned events in conjunction with relatively stable macroeconomic data, lent a hand to equities - as they rounded out the week on a strong note, with several of the major indices registering all-time highs (specifically the S&P 500 and the Nasdaq – propelling higher by 3.4% and 4.2%, respectively). Communication services and technology were the top performing sectors, while energy and real estate found themselves near the bottom of the leaderboard. Artificial intelligence holdings witnessed renewed enthusiasm, with Nvidia notably closing up five days in a row, enabling the stock to reclaim the crown of the world’s most valuable company, as measured by market capitalization. Switching gears, the 2-year yield fell about 15 basis points and the 10-year followed suit, decreasing 10 basis points – potentially reflective of market operators adopting a more dovish stance. Crude oil which caught a bid last week, retreated rather sharply due to a swift de-escalation in the conflict overseas, closing down around 13%. Gold is still in record high territory but retreated a bit as well – rounding out the week down approximately 3% and the Dollar Index continued its descent, falling a shade over 1% - as it attempts to counter the negative sentiment it has faced year-to-date.

Elsewhere, the Fed was in focus yet again and market participants were all ears - as Chairman Powell was on Capitol Hill this week, providing testimony to the House Financial Services Committee and the Senate Banking Committee, respectively. Powell has remained rather steadfast on the Fed’s posture, despite mounting pressure from President Trump and other lawmakers to slash rates. Several Fed governors are now echoing this sentiment as well, with Michelle Bowman and Christopher Walller indicating they may be in favor of a July cut - should inflation continue to moderate. Powell went on to emphasize that the Fed is well positioned to handle its dual mandate of maximum employment and stable prices. In particular, he mentioned they are closely monitoring the impact tariffs may have on inflation - since they want to ensure inflation does not re-emerge, before making any policy
adjustments. Powell explicitly stated: “without price stability, we cannot achieve the long periods of strong labor market conditions that benefit all Americans.”

Please note this week will be a shortened trading week, with US markets closed on Friday in commemoration of the Fourth of July. There will be no shortage of economic releases though, with the labor market front and center (job openings, the ADP employment report, and non-farm payrolls all on tap) and the US tax/spending bill is likely to become more prominent, as there’s been a push for it to be signed into law over the coming days.

On behalf of the team, we would like to extend our wishes for a happy and safe upcoming holiday weekend.

 

Market Scorecard:	6/27/2025	YTD Price Change
Dow Jones Industrial Average	43,819.27	3.00%
S&P 500 Index	6,173.07	4.96%
NASDAQ Composite	20,273.46	4.99%
Russell 1000 Growth Index	4,245.98	5.04%
Russell 1000 Value Index	1,906.27	4.51%
Russell 2000 Small Cap Index	2,172.53	-2.58%
MSCI EAFE Index	2,653.71	17.33%
US 10 Year Treasury Yield	4.292%	-28 basis points
WTI Crude Oil	$65.52	-8.64
Gold $/Oz.	$3,287.60	24.48%