Market Update: 1st July 2025- June Wraps up a Chaotic First 6 Months of 2025

U.S. Stocks & Futures

U.S. equities closed out the first half of 2025 on a high note, S&P 500, Nasdaq, and Dow all booked back-to-back record months, buoyed by easing trade tensions and strong tech earnings. This morning, futures are holding steady near new highs, suggesting a cautious but optimistic open.

Dollar Weakness

The U.S. dollar is hitting multi-year lows, with the Dollar Index at its weakest since early 2022. The euro has climbed above $1.18 amid investor concern over federal debt and political pressure on the Fed to cut rates

Global Equities & Commodities

Asian markets are modestly higher following U.S.’s late-session gains, though OPEC+ production concerns are pushing oil prices lower

Key Drivers Ahead of NFP

1. Fed Rate-Policy Pressure

President Trump continues to push for interest rate cuts, reappearing in public remarks and even a handwritten note. Meanwhile, select Fed voices like Michelle Bowman and Chris Waller indicate that a July cut remains on the table though not yet priced in by futures (currently showing ~23% odds)

2. Trade & Policy Crosswinds

A temporary pause in Canada’s digital services tax and calm on the Middle Eastern front helped hoist markets higher. Yet geopolitical jitters linger: July 9 marks the deadline for the 90-day tariff pause, and fresh mega bill votes in the Senate could stir volatility

3. Eyes on Thursday’s NFP

This week’s shortened holiday schedule means all eyes are on the June jobs report due Thursday. Economists forecast 110K jobs added, with modest wage and unemployment variances any deviation could prompt immediate repricing of Fed expectation.

Conclusion:

Today feels like the calm before the storm. Markets sit near record highs, but underlying risks trade timelines, fiscal bills, and an uncertain Fed are feeding into low-volume caution. It’s a day for watching positioning, liquidity, and cross-asset flows as we edge toward Thursday’s pivotal U.S. jobs report.

Anyway, till next time, all of your trade safe!

By James Trescothick
Head of Market Research and Market Analysis

Risk Disclaimer: This information is for educational purposes only and does not constitute investment advice. Financial markets involve risks, and past performance is not indicative of future results. Always conduct your own research and seek professional advice before making investment decisions.