Introduction#
Equity bulls carried their early‐morning enthusiasm straight through lunch on Friday, 27 June 2025, shrugging off a slightly hotter-than-forecast Core PCE print and focusing instead on two themes that have dominated the week: rising conviction that the Federal Reserve will begin cutting rates by autumn and renewed appetite for anything tied to artificial intelligence. According to Monexa AI intraday data (12:30 p.m. ET), the S&P 500 has already traded through three separate record prints, most recently touching 6,187.66 before settling just below that level. The rally is being driven by a mixture of mega-cap tech leadership—albeit with notable divergences inside the group—and a visible broadening into industrials, consumer cyclical names and selected financials.
Market Overview#
| Ticker | Current Price | Price Change | % Change |
|---|---|---|---|
| ^SPX | 6,178.22 | +37.20 | +0.61% |
| ^DJI | 43,875.25 | +488.40 | +1.13% |
| ^IXIC | 20,266.55 | +98.64 | +0.49% |
| ^NYA | 20,398.13 | +141.93 | +0.70% |
| ^RVX | 22.25 | +0.14 | +0.63% |
| ^VIX | 16.40 | ‑0.19 | ‑1.15% |
| The Dow’s advance is the day’s standout, thanks in large part to a 4.30% surge in BAA). Volatility is drifting lower—the VIX is within a point of its 2025 trough—while the small-cap volatility gauge ^RVX is fractionally higher, a reminder that risk perception remains elevated in the Russell 2000 even as large-caps hit records. | |||
| From a breadth standpoint the NYSE advancers/decliners ratio is running near 1.7-to-1, notably wider than the 1.3-to-1 ratio seen at yesterday’s close—an early signal that participation is starting to broaden beyond the familiar “Magnificent Seven” trade highlighted in several morning notes from Reutersm) and Bloombergm). |
Macroeconomic Analysis#
Economic Releases & Policy Updates#
At 8:30 a.m. the Commerce Department reported that Core PCE rose +2.7% y/y, a tick hotter than the +2.6% consensus. On the surface that complicates the Fed’s inflation fight, yet futures traders doubled‐down on rate-cut bets after the release. CME FedWatch now assigns a 74% probability of at least three quarter-point cuts by December, up from 68% yesterday, reflecting the market’s view that softening in the labour market and consumer spending will outweigh sticky services inflation.
Weekly jobless claims, released Thursday, edged higher for a fifth straight week and several sell-side shops—Barclays, Citi and Bank of America—warn that next Friday’s non-farm payrolls could miss expectations. Fed messaging is no longer uniform: Minneapolis Fed President Neel Kashkari this morning told CNBCm) that “further evidence of labour-market cooling could open the door to cuts sooner than September,” undercutting still-hawkish language from Governor Waller earlier in the week.
Global / Geopolitical Developments#
Overnight, Washington and Beijing confirmed the framework of a limited trade accord, which includes a phased roll-back of select tariffs once China resumes rare-earth exports to U.S. manufacturers. Treasury Secretary Scott Bessent framed the deal as “the first real de-escalation in two years,” and the announcement fuelled an immediate bid for industrial metals, semiconductors and, by extension, risk assets broadly.
Sector Analysis#
| Sector | % Change (Intraday) |
|---|---|
| Real Estate | +1.38% |
| Consumer Defensive | +0.97% |
| Industrials | +0.74% |
| Communication Services | +0.69% |
| Healthcare | +0.63% |
| Consumer Cyclical | +0.42% |
| Technology | +0.26% |
| Basic Materials | ‑0.20% |
| Financial Services | ‑0.40% |
| Energy | ‑0.46% |
| Utilities | ‑0.51% |
| Real-estate investment trusts lead the tape, lifted by a 4.45% pop in EQIXX) after an upbeat sell-side data-center survey. Industrials are benefitting from the trade thaw, led by BAA) and HWMM). Energy is the one clear laggard, with both crude and refined-product names under pressure; Brent futures are off nearly -1.8% at midday, retracing last week’s short-lived spike. |
Company-Specific Insights#
Nike steals the spotlight#
Shares of NKEE) are up 15.0% at lunch, erasing year-to-date losses in a single session. Management’s “Win Now” turnaround blueprint is finally delivering traction: FQ4 EPS of $0.14 beat the Visible Alpha consensus by two cents, while revenue of $11.1 billion topped estimates by roughly $400 million despite a steep double-digit decline in Greater China. Investors appear willing to look through a $1 billion tariff headwind flagged by CFO Matt Friend, especially after JPMorgan boosted its price target to $64 and HSBC upgraded the name to Buy before the open.
Alphabet splits the crowd#
Alphabet’s class-A shares GOOGLL) are fractionally lower after Bank of America reiterated a Buy and called Google “one of the best-positioned consumer-AI platforms,” but incremental buyers are scarce following a week-long debate about search monetisation risks. With Gemini queries now topping 480 trillion tokens / month, bulls argue the data advantage is widening, while bears point to minor engagement losses to ChatGPT. Price action suggests a holding‐pattern ahead of next Wednesday’s antitrust hearing in D.C.
AeroVironment’s week of out-performance#
Even after a 43% rally since Monday, AVAVV) tacked on another 1.2% this morning. BTIG’s new $300 target (versus $225 prior) pegs the stock at roughly 8× FY-25 sales, still a steep discount to private drone peers. Defence desks say order momentum tied to European replenishment programs remains “unabated.”
Mixed tech tape masks rotation#
Elsewhere in tech, NVDAA) is up 1.5%, reclaiming early-week losses, while data-analytics darling PLTRR) slumps 3.9% as traders fade Wednesday’s Gartner Hype Cycle buzz. Payment giant MAA) advances 1.7% alongside AXPP), benefiting from upbeat consumer sentiment readings.
Energy weakness extends#
Renewable favourite ENPHH) is down more than 7% after Goldman’s solar team warned of “an inventory glut that could persist into Q4.” Traditional refiners are not immune: VLOO) and MPCC) both shed roughly -1.5%, tracking a decline in gasoline crack spreads.
Extended Analysis#
The equity market’s resilience in the face of sticky services inflation argues that liquidity rather than valuation remains the dominant driver. Year-to-date S&P 500 returns are skewed, but today’s session adds evidence that breadth may be in the early stages of repair. NYSE new highs out-number new lows by a four-to-one margin, the best ratio since late February.
Fund managers we spoke with this morning flagged three under-appreciated currents: First, the dispersion trade is gaining traction. A basket of equal-weighted S&P names is lagging the cap-weighted index by ~610 bps YTD, yet today that gap is narrowing, hinting at systematic re-balancing flows. Second, the SOFR futures strip is now pricing an end-2025 policy rate below 3.75%, effectively a full percentage point lower than the Fed’s March dot-plot. Third, while equity volatility grinds lower, credit volatility has perked up; the CDX IG index widened three basis points this morning, a potential canary.
Under the surface, the Energy vs Tech relative‐strength ratio sits at a six-month low. Seasonally adjusted refinery utilisation hit 95% last week (EIA), yet product inventories remain stubbornly high—evidence that softening consumer demand could be bleeding into fuel usage. Conversely, semiconductors continue to re-rate on every incremental AI headline. The risk is obvious: a macro disappointment, especially in next week’s non-farm payrolls, could dent the “soft landing” narrative and pressure cyclicals just as they start to outperform.
Conclusion#
By midday the market is sending a fairly clear message: investors are willing to pay for growth and optionality, even in the face of lingering inflation pressure, so long as the Fed is viewed as leaning toward accommodation. Record prints in three major indices underscore that point, yet today’s leadership mix—Nike, Boeing, GE Vernova, Equinix—suggests the rally is slowly broadening. Sector rotation into industrials, consumer cyclicals and real estate is encouraging, though Energy’s persistent weakness and still-narrow mega-cap concentration remain watch-items.
Afternoon catalysts are light, leaving flows and month-end rebalancing the primary drivers into the close. Traders will keep one eye on crude and another on bond yields; a further drift lower in the 10-year below 3.95% could extend equity momentum, while any reversal could quickly test fragile breadth gains.
Key Takeaways#
The S&P 500, Dow Jones and Nasdaq all carved out new intraday highs, powered by rate-cut optimism and AI-linked enthusiasm. Nike’s blow-out earnings and upbeat commentary triggered a 15% surge, anchoring a consumer-cyclical rebound. Boeing led industrials on trade-deal headlines. Energy was the sole sector in decisive negative territory, as both fossil-fuel and renewable names weakened. Volatility benchmarks imply complacency, but a busy data calendar next week—highlighted by non-farm payrolls—could challenge that calm. Investors looking to rotate may find better risk-reward in industrials, consumer defencives and selective financials, while maintaining caution toward Energy and high-beta AI proxies that have run far ahead of fundamentals.