A $10 TRILLION RALLY.
Signia Invest Insights | June 2025
Market Review and Outlook
- In just 80 days since the post-Liberation Day low on April 8, investors turned from panic to FOMO, pushing the S&P 500 a remarkable 24% higher to reach another all-time-high in June, adding a staggering $10 trillion to its market capitalisation in the process, approximately half ($5 trillion) coming from the Magnificent 7 stocks alone! Even more impressive was that this rebound was the quickest S&P 500 recovery in history following a 15+% drop. With technology shares leading the way, the Nasdaq composite also hit a record high, rising 6.6% in June.
- In contrast, European equites broadly struggled, with the Stoxx 600 and FTSE 100 declining -1.3% and -0.1%, respectively. That said, European bank stocks just completed their strongest first-half since 1997, and in doing so extended what has been a golden run for the sector, as the Stoxx 600 Banks Index rose 29% in the six months through June 30, the top-performing subgroup in Europe due to strong returns on equity and resilient earnings growth. Emerging market assets also fared well as the US Dollar continued to weaken, as EM equities rallied 5.7% in June whilst the US Dollar declined -3.7% against the Euro (-13.7% year-to-date).
- The optimism in the US came ahead of President Trump securing a sweeping shift in US domestic policy as the House of Representatives narrowly passed his “One Big Beautiful Bill Act”. The $3.4 trillion fiscal package was narrowly passed by the Senate with Vice President JD Vance providing the casting tie-break vote (51-50), prior to being passed by the House of Representatives in a 218-214 vote. The bill cuts taxes, curtails spending on safety-net programs and reverses much of former President Joe Biden’s efforts to move the country toward a clean-energy economy, and was signed into legislation on Trump’s self-imposed Independence Day deadline on July 4. The president overcame resistance from both conservative hardliners concerned about the public debt impact of the bill, and swing-state Republican moderates worried about the scale of Medicaid cuts. In the end, only two Republicans joined with Democrats to oppose the bill. In an impressive but ultimately futile attempt to block a final vote, House Democratic Leader Hakeem Jeffries spoke for 8 hours and 45 minutes, breaking the record for the House’s longest “magic minute” floor speech. We note that the $5 trillion debt ceiling increase included in the bill kicks this problem well down the fiscal road for 2-3 years given the current run rate of deficits, so one less political issue to worry about for a while.
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