Introduction#
According to Monexa AI’s closing tape, U.S. equities climbed for a third straight session on Thursday, pushing the S&P 500 to 6,141.01 and within a whisker of a new intraday record. The advance was powered by another broad-based melt-up in large-cap technology, a resurgence in energy shares, and a late-day bid into cyclicals once Washington signalled flexibility on the July 9 tariff deadline. Overnight, traders digested upbeat Asian and European sessions, fresh headlines on a potential extension of U.S.-EU tariff negotiations, and a slate of central-bank sound-bites that kept rate-cut hopes alive ahead of this morning’s Personal Consumption Expenditures (PCE) inflation release.
Stay ahead of market trends
Get comprehensive market analysis and real-time insights across all sectors.
Market Overview#
Yesterday’s Close Recap#
| Ticker | Closing Price | Price Change | % Change |
|---|---|---|---|
| ^SPX | 6,141.01 | +48.86 | +0.80% |
| ^DJI | 43,386.84 | +404.41 | +0.94% |
| ^IXIC | 20,167.91 | +194.36 | +0.97% |
| ^NYA | 20,235.33 | +147.88 | +0.74% |
| ^RVX | 22.11 | −0.23 | −1.03% |
| ^VIX | 16.14 | −0.45 | −2.71% |
The Dow Jones Industrial Average logged a 400-point rally, its best single-day point gain in nearly a month, while the NASDAQ Composite eked out a fresh closing high as large-cap chipmakers and cloud infrastructure names extended their June rebound. Volatility measures slipped to six-week lows; the CBOE Volatility Index (VIX) finished at 16.14, underscoring complacency ahead of key macro data.
More market-overview Posts
AI Momentum Meets Rate Reality As Wall Street Eyes The Open
Tech-led gains mask deep sector divergences; watch Fed chatter, real-estate stress and today’s data cue for the next move.
June 25, 2025 Morning Market Overview: AI Surge vs Tariff Headwinds
S&P 500 edged lower as AI giants led gains while tariff-exposed sectors lagged. Fed policy and trade tensions set the stage for Wednesday's market open.
Broad Market Retreat Highlights Tech and Logistics Divergence
Markets closed lower as S&P 500 dipped slightly, led by FedEx guidance and mixed tech signals, setting a cautious tone for the next session.
Investors cited three principal drivers: firmer crude-oil prices that sparked rotation into exploration and midstream plays; a second straight day of upbeat earnings beats from mid-cap industrials; and mounting optimism that today’s PCE print will confirm the disinflationary trend implied by May’s CPI and PPI releases.
Overnight Developments#
Asia kicked off the global risk rally after Shanghai traders cheered headlines suggesting “constructive” progress in U.S.–China trade discussions. The CSI 300 closed up +1.4%, its best session in two weeks. In Europe, the Stoxx 600 added +0.7% by midday after ECB Vice-President Luis de Guindos echoed Wednesday’s Sintra comments, stressing the eurozone is “on track” to meet the 2% inflation goal.
On the policy front, Fed Chair Jerome Powell maintained his data-dependent stance at an Atlanta Fed forum, but traders noted his remark that “the last mile of disinflation is proving less bumpy than feared.” Rate-futures now price roughly 46 bp of cumulative easing this year, up from 42 bp 24 hours earlier.
Macro Analysis#
Economic Indicators to Watch#
The May PCE Price Index (08:30 ET) is the marquee release. Consensus compiled by Bloomberg calls for a headline rise of +0.1% m/m and +2.6% y/y; the core is seen up +0.2% m/m and +2.6% y/y. A print at or below those levels would reinforce the notion that Q2 inflation risks remain contained, emboldening the market’s September cut narrative.
At 10:00 ET, the University of Michigan’s final June Consumer Sentiment revision will offer a real-time pulse on household inflation expectations. Fed voters Austan Goolsbee and John Williams speak after the bell; traders will parse any colour on balance-sheet strategy or long-term neutral-rate estimates.
Global & Geopolitical Factors#
Tariff risk remains a slow-burn variable. The White House hinted that the July 9 deadline for a potential 50% levy on EU imports is “not critical,” soothing fears of an immediate escalation. Meanwhile, reports of bipartisan support for extended rooftop-solar tax credits gave the renewable-energy complex fresh life and appeared to be the catalyst behind the +12.83% surge in ENPHH) yesterday.
Elsewhere, oil traders are monitoring the Iran backdrop after officials suggested negotiations could reopen on sanctions relief. Brent sits near $87 a barrel, up almost +9% month-to-date, adding a tail-wind to U.S. energy earnings estimates.
Sector Analysis#
Sector Performance Table#
| Sector | % Change (Close) |
|---|---|
| Financial Services | +1.67% |
| Communication Services | +1.57% |
| Technology | +1.09% |
| Energy | +1.07% |
| Industrials | +1.03% |
| Utilities | +1.01% |
| Basic Materials | +0.75% |
| Healthcare | +0.29% |
| Consumer Cyclical | +0.26% |
| Consumer Defensive | −1.82% |
| Real Estate | −3.61% |
The leadership baton shifted toward Energy, Technology, and Basic Materials. Enphase’s double-digit pop anchored a renewable-plus-oil duality: legacy E&Ps like APAA) tacked on +3.65%, while midstream operator WMBB) jumped +3.59% after pricing a $1.5 billion bond offering barely five basis points inside talk—evidence of healthy appetite for balance-sheet expansion.
Technology posted its sixth gain in seven sessions. Server-maker SMCII) advanced +5.71% on the heels of a $2.3 billion convertible offering that instantly upsized on hot demand, signalling institutional comfort with growth-capex dilution. ANETT) and DELLL) each added more than +4.5% as buyside desks chased anything linked to AI-driven data-center build-outs.
Real Estate lagged sharply, dragged lower by a −9.56% slide in hyperscale REIT EQIXX) after sell-side chatter about elevated power-rate renegotiations. The move illustrates ongoing duration risk for highly levered REITs in a still-restrictive rate climate.
Company-Specific Insights#
Earnings and Key Movers#
Chipmaker MUU) delivered the headline of the session, posting adjusted EPS of $1.91 versus the $1.59 whisper and guiding fiscal Q4 revenue to $10.7 billion (±$300 million)—a cool 9% ahead of consensus. Yet shares slipped −0.98% as traders booked profits into a 34% year-to-date run and weighed management’s caution on PC-and-mobile demand. Importantly, management flagged a near-50% sequential jump in High-Bandwidth Memory sales, bolstering the bullish AI narrative.
Industrial tech name AYII) smashed projections with a $5.12 EPS print and an 8% revenue surprise, powering the stock +5.81%. Management highlighted double-digit order growth in intelligent-building solutions, hinting at a demand inflection as corporate capex pivots from cost savings to productivity upgrades.
Specialty-chemicals maker FULL) rallied +10.78% after lifting full-year guidance on margin expansion. Meanwhile, WBAA) edged up +0.62% even as EPS fell 40% y/y, signalling the market is already discounting retail-pharmacy headwinds ahead of its $10 billion take-private.
In consumer staples, MKCC) overcame tariff worries, gaining +5.34% on flat but better-than-feared adjusted EPS. Management said it has “line of sight” to fully mitigating tariff-driven agricultural-input inflation in 2025, a data point reinforcing margin-defensive pricing power in essential categories.
Among cyclicals, cruise operator RCLL) climbed +4.06% as booking curves extended into late 2026, while ABNBB) added +3.12% on reports of record summer occupancy rates. Conversely, TSLAA) slipped −0.54% amid chatter of further EV-subsidy cuts in key European markets.
Unusual Option Activity and Flows#
Options desks flagged heavy call buying in UBERR) after The New York Times revealed founder Travis Kalanick is courting investors—potentially including Uber itself—to acquire Pony.ai’s U.S. unit. Thirty-day implied volatility popped six points yet remains below the 70th percentile, implying room for further premium expansion should a deal crystalise.
Separately, block trades in July 130 calls on DELLL) printed at three times open interest, suggesting speculation that the company’s Infrastructure Solutions Group will snag incremental AI-server share when June quarter data rolls out.
Extended Analysis#
Cross-Asset Signals#
Treasuries were steady overnight with the 10-year note anchoring near 4.28%, down almost 20 bp from the mid-June highs. The benign rate backdrop is cushioning equity valuations in duration-heavy corners such as cloud software and semi-capital equipment.
In commodities, copper’s +6.85% surge in FCXX) shares mirrored LME spot’s breakout above $9,700/t on Chinese restocking chatter. The move reinforces a constructive stance toward Basic Materials, particularly miners with low incremental capacity costs.
Valuation Check-Up#
The forward S&P 500 P/E stands just above 21.5×, roughly one turn richer than the five-year average but still 80 bp inside the early-2024 peak. Markets are effectively pricing two rate cuts by December and mid-teens EPS growth through 2026. Any upside surprise in today’s PCE figure or hawkish Fed language could compress multiples quickest in profitless tech; however, elevated sector correlations—currently one standard deviation above the 10-year mean, per SocGen—indicate the broader tape would feel any valuation squeeze.
What Could Change the Narrative#
- A hotter-than-expected core PCE print above +0.3% m/m would likely nudge September cut expectations off the table and test equity resilience.
- A breakdown in tariff negotiations could revive stagflation fears, particularly for Consumer Defensive names lacking pricing elasticity.
- Faster-than-forecast AI data-center capex has the opposite effect—reinforcing the bull case that current multiples understate semiconductor-cycle duration.
Conclusion#
Morning Recap and Outlook#
Futures sit marginally higher heading into the open, extending Thursday’s momentum as traders place their chips on a friendly PCE print and a Powell doctrine that “good things happen slowly; bad things don’t have to happen at all.” Energy leadership, robust semi earnings, and improving breadth point to a still-constructive risk backdrop. Yet with volatility scraping multi-month lows and sector correlations elevated, the bar for a macro disappointment is low.
Investors should keep an eye on
– The 08:30 ET PCE release for confirmation—or refutation—of the disinflation trend.
– Post-data Treasury reaction; a repricing toward 4.35% on the 10-year could stall rate-sensitive groups.
– Guidance commentary from the raft of mid-cap industrial conferences next week, which will either validate or temper the reflationary bid in cyclicals.
Key Takeaways: equities are flirting with records because AI-linked capex and energy demand continue to deliver tangible earnings beats; Real Estate and Consumer Defensive caution remind us that micro dispersion remains high; and today’s PCE and Fed rhetoric form a binary catalyst that could either cement a summer melt-up or prompt a tactical volatility spike. Positioning into the weekend favours maintaining exposure to high-quality AI infrastructure names like MUU) and cash-rich energy producers, while keeping dry powder should inflation surprise to the upside.