June 27, 2025, Weekly Stock Market Return Recap, by Kip Lytel CFA, Montecito Capital Management. The S&P 500 wrapped up the week approaching its former record high, as optimism grew from trade negotiations and the likelihood of a Federal Reserve rate cut. Furthermore, stocks advanced as markets reacted positively to encouraging news after several days marked by Middle Eastern tensions and fluctuating tariff concerns. The S&P 500 has gained more than 20% since it reached a low point on April 8 and is now nearly 5% up for the year. During this time, investors have continued to buy, even in the face of rising oil prices caused by the Israel-Iran conflict and a spike in yields linked to deficit anxieties. The latest figures from the Federal Reserve’s favored inflation indicator revealed that price increases quickened in May, with inflation staying above the Fed’s 2% target. Jerome Powell, the Chair of the Federal Reserve, has pointed out that rising price pressures could pose a challenge to implementing a rate cut.
June 20, 2025, Weekly Stock Market Return Recap, by Kip Lytel CFA, Montecito Capital Management. With investors feeling uneasy about the Iran-Israel conflict as the weekend approaches, and with the U.S. deliberating its potential involvement, the stock market ended the week with mixed results: The Dow was relatively unchanged, the S&P 500 decreased by 0.2%, and the Nasdaq increased by 0.2%. However, historical data from past geopolitical shocks since 1939 suggests that the median market loss from such events is only -5.6%, typically lasting just 16 days. Furthermore, markets usually rebound quickly, with sixty percent of the time, the S&P 500 Index has recovered losses within a month of reaching its lowest point. The Federal Reserve has kept its key borrowing rate targeted in a range of 4.25%-4.5%, where it has remained since December. However, the central bank anticipates that inflation will continue to be elevated and predicts lower economic growth ahead. Nevertheless, the Federal Open Market Committee is expected to implement two rate reductions later this year, according to the closely monitored “dot plot.” The FOMC statement has changed little since the May meeting. Broadly speaking, the economy has been growing at a “solid pace,” with “low” unemployment and “somewhat elevated” inflation, as stated by the committee. Moreover, the committee has indicated less concern regarding the fluctuations in the economy and the uncertainties surrounding White House trade policy.
June 13, 2025, Weekly Stock Market Return Recap, by Kip Lytel CFA, Montecito Capital Management. The S&P 500 declined by 0.4%, while the Nasdaq dropped by 0.6%. The Dow fell by 1.3% during the week. This downturn was primarily attributed to a significant drop on Friday, June 13, when the index fell by 1.1%. The week commenced with slight gains; however, rising tensions in the Middle East, especially following Israel’s strikes on Iranian targets, triggered a market sell-off. Inflation remained subdued in May, countering concerns that the effects of President Trump’s tariffs would lead to an increase in prices. Consumer prices saw a modest rise of 0.1% in May compared to the previous month, which was below economists’ expectations. Year-over-year inflation stood at 2.4%, aligning with forecasts and close to a four-year low recorded in April. This report is likely to prompt inquiries regarding the timing of a widely anticipated increase in prices this summer, which is expected by both the Federal Reserve and private-sector economists. The May Producer Price Index (PPI) also increased less than anticipated, reinforcing the argument for caution from the Federal Reserve. Producer prices rose by 0.1% in May, which was below the predicted 0.3% increase and marked a recovery from April’s revised decline of 0.2% (initially reported as -0.5%), as per the Bureau of Labor Statistics. Consumer sentiment saw an uptick in June for the first time in six months, indicating that Americans’ perceptions of the economy have improved as inflation has remained low and the Trump administration has achieved a truce in its trade conflict with China.
June 5, 2025, Weekly Stock Market Return Recap, by Kip Lytel CFA, Montecito Capital Management. The S&P 500 has surpassed the 6000 mark for the first time since mid-February. The index recorded its second consecutive weekly gain, closing up 1.5% from the previous Friday, and is now 2.34% below its all-time high from February 19th, 2025. Investors welcomed the news that President Donald Trump stated three cabinet officials will engage with representatives of China in London on June 9 to discuss a trade agreement. The Dow increased by 1.2%, while the Nasdaq gained 2.2%. The latest Non-Farm Payrolls report for May indicated that the U.S. economy added 139,000 jobs, exceeding the expected 130,000 jobs. This job number, though higher than anticipated, reflects a slight decrease from the previous month’s addition of 147,000 jobs. The European Central Bank (ECB) reduced interest rates by an additional 25 basis points during its June policy meeting, lowering its deposit facility rate to 2.00%. In the subsequent press conference, ECB President Lagarde referenced moderating inflation and downside growth risks as reasons for the rate cut decision.
