Stock Market Continues Upward Trajectory
Vibe Check: Stock markets are on a roll, baby! Interest rates could be dropping like a hot potato, and Wall Street's loving it. But don't toss your worry beads just yet—pressure's cookin' on the Fed chair, and the Middle East's got a few cards up its sleeve. Let's dive in!
Street Talk: The street's abuzz! With President Trump egging on Jerome Powell, the Fed chair, hopes for a rate cut as early as July are burning bright on Wall Street. Investors are pouring cash into stocks, leaving their Middle Eastern worries behind.
Market Movers: The US stock markets closed yesterday with a positive tilt. After a slow start, purchases zoomed ahead during trading hours, setting an upward trend for three of the past four trading days. The Dow Jones Index soared by 0.9%, reaching 43,387 points. The S&P-500 and Nasdaq indices shot up by up to 1.0%. While the Nasdaq Composite and the S&P-500 Index are just below their record highs, the Nasdaq-100 Index has already broken that record. As per preliminary numbers, there were 2,203 winners and 568 losers on the NYSE. 53 titles remained unchanged.
Tariffs & Chill: As the situation in the Middle East fades into the background, market participants are taking a closer look at monetary policy and interest rate expectations. Lately, whispers have been floating around that interest rates could be lowered as early as the next monetary policy meeting in July. The probability of this was priced in at just over 20% on the futures market, compared to around 13% a week ago.
Money Monkey Business: It seems Trump wants to step up the pressure on Powell by speeding up the appointment of his successor. During Powell's remaining eleven-month term, the successor could influence expectations about monetary policy with appropriate comments. That's some heavy scrabble, huh? 'Cause Powell's seat ain't exactly chillin' these days!
Economic Indicators: A slew of new or revised economic indicators showed some robustness. Orders for durable goods in the US rose strongly in May. The number of weekly initial jobless claims fell more than expected. Yet, the revised US GDP in the first quarter was revised down to 0.5% from 0.2% in the third reading.
Greenbacks & Euros: The persistent interest rate cut fantasy and concerns about the independence of the US central bank have kept the dollar in check. The euro broke through the 1.17 mark and is currently trading at 1.1701 dollars. The Dollar Index fell by 0.4%. On the US bond market, yields fell again, by 3 basis points to 4.26% in the ten-year range.
Oil & Gold: Oil prices received support from the significantly lower weekly US oil inventories reported the previous day. US oil of the WTI variety rose by 0.7%. Gold showed little movement.
Top Performers: Micron Technology significantly exceeded expectations with its third-quarter results. Despite this, the stock still dipped by 1.0%. Nvidia, which reached a new all-time high on Wednesday, continued to rise by 0.5%. Apple lagged behind with a 0.3% decline after JP Morgan lowered its price target. Meta Platforms gained 2.5% on the day. In its quest to advance its AI activities, Meta CEO Zuckerberg has poached three top experts from OpenAI.
Loser's Circle: Tesla took a 0.6% hit following reports that Tesla and a key ally of CEO Elon Musk have gone their separate ways. Omead Afshar, responsible for sales and production in North America and Europe, has left the company. H.B. Fuller surged 10.8% after raising its full-year outlook following strong quarterly results. Worthington Steel reported increased profits despite declining revenues, sending the stock up over 20%. Meanwhile, investment bank Jefferies reported lower quarterly revenues and profits, missing expectations, but the stock still rose by 0.3%. Walgreens Boots Alliance improved by 0.6% after increasing sales in the reported quarter.
For more on today's market activity, check out here.
Key Players: Wall Street, Fed, Jerome Powell, Monetary Policy
Enrichment Data:- As of June 2025, the Federal Reserve has kept the federal funds rate steady at 4.25%–4.50% for four consecutive meetings, including the most recent in June 2025. This reflects a cautious, wait-and-see approach amid economic uncertainties such as tariff impacts and inflation risks[3].- The June 2025 Federal Open Market Committee (FOMC) projections indicate the median view among Fed officials anticipates two quarter-point rate cuts during 2025. This projection was consistent with the previous dot plot from March 2025[1][2].- The Fed’s updated economic outlook includes expectations of lower GDP growth and higher inflation through 2025, signaling potential challenges that influence the timing and magnitude of any rate adjustments[1].- The FOMC participants’ individual projections for year-end 2025 for the federal funds rate fall mostly between 3.875% and 4.375%, reflecting expectations that the rate will decline from the current level by the end of the year[2][4].- Given the Fed’s cautious stance and the recent steady rate holding pattern, a rate cut at the July 2025 meeting is possible but not guaranteed. The Fed is monitoring incoming inflation and unemployment data closely before making moves.- Chair Jerome Powell has emphasized that the Fed can "afford to be patient," neither rushing to cut rates nor raising them prematurely, due to ongoing risks including tariff-related inflation pressures and economic growth uncertainties[3].- Financial markets are currently pricing in potential 25 basis point rate cuts not only in July but also possibly in September and October 2025, reflecting expectations that policy easing may begin in the second half of the year[3].
In light of the ongoing economic uncertainties and potential tariff impacts, the Federal Reserve is keeping a cautious approach by maintaining the federal funds rate, while financial markets are pricing in possible rate cuts in July, September, and October. As the pressure on Jerome Powell grows, investors are closely monitoring the employment policy and community policy regarding interest rates and monetary policy, affecting their investing decisions in businesses and the stock market.
