June 27, 2025
S&P futures are up 0.2% Friday morning after Thursday’s strong rally pushed the S&P 500 and Nasdaq to within 0.1% of record highs. Leadership came from banks, credit cards, aerospace & defense, and machinery, with NVDA among notable tech gainers. Asian markets ended the week mixed but higher overall; Europe is also up modestly and tracking for weekly gains. Treasuries are slightly weaker this morning but set for solid weekly performance. The dollar index is up 0.2%, gold down 1.5%, bitcoin futures off 0.5%, and WTI crude up 0.7%, though still on pace for an ~11% weekly decline.
Positive trade headlines and easing Fed expectations continue to underpin sentiment. Trump said the U.S. and China signed a trade deal, though details were sparse. Commerce Secretary Lutnick added that China will implement rare earths export curbs and the U.S. will remove related countermeasures. The EU may lower tariffs ahead of the 9-Jul deadline, though the White House has downplayed its importance. Treasury Secretary Bessent urged Congress to scrap the Section 899 tax after reaching a G7 deal. However, the Senate reconciliation bill faces delays following a ruling against key healthcare provisions.
Today’s focus is on May core PCE (expected +0.1% m/m, +2.6% y/y), personal income and spending, and final June Michigan sentiment. Fedspeak continues to highlight internal division. Kashkari said inflation trends are encouraging but warned of tariff risks. Governor Cook and Cleveland’s Hammack also speak today. The Fed will release bank stress test results after the close.
Corporate Highlights:
- NKE beat on Q1 results and guided better than expected, noting a $1B tariff impact for the year that it plans to fully offset.
- CNXC posted mixed Q2 results but raised FY guidance, citing strength in AI Services.
- EPAC delivered a slight beat in Q3 as pricing offset higher costs.
- AAPL changed App Store rules and fees in the EU to comply with antitrust mandates.
- META may face daily EU fines over uncertainties tied to its pay-or-consent model.
- UNFI warned a cyberattack will negatively impact Q4 results.
U.S. equities rallied Thursday with the S&P 500 and Nasdaq closing just shy of record highs. Broad participation drove the gains, led by economically sensitive sectors like energy, industrials, and consumer discretionary. Treasury yields declined following a well-received 7-year note auction, steepening the curve. The dollar index fell 0.5% to a three-year low, while gold rose 0.2%. Bitcoin futures dipped 0.2%, and WTI crude settled up 0.5% after a volatile session.
The macro backdrop remained largely supportive of risk assets. Volatility remains subdued, while softening economic data and political pressure continue to stoke expectations of Fed rate cuts later this year. Initial jobless claims came in below expectations at 236K, while May durable goods orders exceeded estimates. However, Q1 GDP was revised down to -0.5%, the lowest since Q1 2022, with consumption marked down and inflation metrics revised higher. The May pending home sales index beat expectations. Fed officials maintained a patient stance, with comments from Goolsbee, Barr, Barkin, Daly, and Collins suggesting a consensus for later-year cuts. Meanwhile, anticipation of a Trump pick to succeed Powell and movement on trade remain in focus. EU officials are reportedly considering tariff reductions to help finalize a trade deal before the July 9 deadline. The U.S. Treasury also announced a deal with G-7 allies to eliminate the proposed Section 899 “revenge tax.”
S&P 500 Sector Performance
Outperformers: Communication Services (+1.77%), Energy (+1.50%), Consumer Discretionary (+1.18%), Industrials (+1.10%), Materials (+1.09%), Utilities (+0.82%)
Underperformers: Real Estate (-0.64%), Consumer Staples (-0.18%), Healthcare (+0.24%), Technology (+0.68%), Financials (+0.76%)
Information Technology
- MU beat and raised guidance, with upbeat commentary on DRAM and HBM supporting the AI narrative.
- MSFT and OpenAI are reportedly clashing over the definition of artificial general intelligence (AGI).
- U fell 3.1% after BofA reinstated coverage at Underperform, citing skepticism over monetization of Unity’s engine.
- TTD declined 2.6% after a Wells Fargo downgrade, citing competitive pressures from Amazon’s DSP partnerships.
Communication Services
- AAPL plans to open the EU App Store to third-party apps to comply with antitrust regulations.
- META hired an OpenAI researcher and is exploring the acquisition of PlayAI to bolster its AI capabilities.
- PENN rose 4.9% after an upgrade at Citizens citing a favorable risk-reward outlook and upcoming catalysts.
- EQIX dropped 9.6% following a BMO downgrade on slower growth expectations.
- CORZ jumped 33% amid reports of acquisition talks with CRWV.
Consumer Discretionary
- TSLA was in the spotlight again following the departure of top executive Omead Afshar.
- XIACY surged 9.9% after receiving over 200K orders for its new budget-friendly YU7 EV, seen as a rival to Tesla’s Model Y.
- MLKN extended gains after its strong fiscal Q4 report, citing broad-based order strength and business momentum.
Consumer Staples
- MKC rose 5.3% after beating Q2 estimates. The Consumer division was strong, while guidance, including tariff impacts, was viewed positively.
- WBA reported a beat driven by strength in its healthcare segment, though front-end sales were weak.
Financials
- JEF reported light fiscal Q2 EPS due to early-quarter policy uncertainty, though forward-looking commentary was constructive.
- U.S. banking stocks broadly benefitted from optimism around deregulation and dealmaking amid rate tailwinds.
Industrials
- AYI gained 5.8% after beating on Q3 EPS and revenue, led by strength in ABL and AIS segments.
- AVAV rallied 15.9% following reports Trump wants increased missile and drone funding in next year’s defense budget.
- SCS posted better-than-expected Q1 results, citing strong demand across enterprise, government, and healthcare segments.
- CRWV was reportedly in talks to acquire CORZ.
Materials
- WS surged 20.5% on an FQ4 beat driven by higher volumes, wider metal spreads, and gross margin expansion.
- FUL also posted a beat and raised its outlook.
Healthcare
- INCY rose 4.8% after appointing Bill Meury as President and CEO, with investors viewing the leadership move favorably.
Energy
- XOM, CVX, and peers saw strength as WTI crude climbed and EU officials moved toward easing trade barriers.
- BP gained 1.6% amid renewed speculation of acquisition interest from Shell.
Eco Data Releases | Friday June 27th, 2025
S&P 500 Constituent Earnings Announcements | Friday June 27th, 2025
No reports today
Data sourced from FactSet Research Systems Inc.
