1. US Equities at Record Highs with Selective Caution

The S&P 500 and Nasdaq Composite are battling back from early‑year trade-induced routes, now hitting all‑time highs—S&P at 6,173.07 as of June 27, 2025.

That said, investor sentiment remains cautious: surveys show few expect more than a 10% upside through year‑end, even as buybacks and AI optimism fuel gains.

2. Tariff Truce, but July Deadline Looms

The 90‑day tariff pause initiated on April 9 has lent markets breathing space. However, with the next deadline set for July 9, U.S.–EU and U.S.–China trade negotiations could trigger renewed volatility. Investors should brace for flare‑ups—only to remember past patterns of “announce, angst, then retreat.”

3. Tech & AI Lead Equity Charge

Technology continued to outpace, driven largely by AI enthusiasm. Second-quarter earnings from Big Tech are key catalysts for performance, as history shows July tends to be a strong month for the sector. While soft‑landing hopes rise, the biggest risk? A speculative “melt‑up.” Ed Yardeni, among others, warns the S&P’s rise—10% this quarter—is eerily reminiscent of the pre‑correction phase in April.

4. Global Diversification Paying Off

Outside the U.S., regional dynamics offer added ballast. Germany’s June inflation easing (to 2%) and easing trade fears have stabilised STOXX 600, even as it posted a monthly decline. China and Europe tech are showing incremental strength—reflecting a trend toward broader market participation.

5. Rates on a Tilt Toward Cuts

U.S. bond futures now price in two to three Fed cuts by year‑end. Treasury yields are cooling—10‑year yields slipped to near two‑month lows. Lower rates support equity valuations and corporate borrowing, bolstering sentiment as earnings season looms.

Final Word: The summer trade feels more like a marathon than a sprint. U.S. equities have recovered sharply, but fragilities linger—mainly in trade policies and sentiment. A diversified, tech-tilted portfolio, with prudent yield hedging, seems best positioned. And while melt‑up euphoria is tempting, volatility remains poised to clip complacency.

Risk Disclaimer: The information provided herein is for educational and informational purposes only and should not be considered financial advice or an offer to buy or sell any financial instrument. 

Investing involves risks, including the possible loss of principal. Past performance is no guarantee of future results. You should consult with a financial advisor before making any investment decisions

Disclaimer: The content provided on this blog is for informational purposes only and does not constitute financial advice. The opinions expressed here are the author's own and do not reflect the views of any associated companies. Investing in financial markets involves risk, including the potential loss of your invested capital. Past performance is not indicative of future results. 

You should not invest money that you cannot afford to lose. Mentions of specific securities, investment strategies, or financial products do not constitute an endorsement or recommendation. The author may hold positions in the securities discussed, but these should not be viewed as personalised investment advice. 

Readers are encouraged to conduct their own research and seek professional advice before acting on any information provided in this blog. The author is not responsible for any investment decisions made based on the content of this blog.

Alpesh Patel OBE

www.campaignforamillion.com