executive Summary
- S&P 500 and Nasdaq 100 Q2at finished new all-time high
- Indicate industrial and financial economic power at the new level
- US Dollar Index with the biggest 6 meter fall in 16 years (2009) (DXY)
- S&P 500 Corporate EPS is estimated to increase by 5% in Q2 2025
- Nine of the 11 large-caps sectors are positive ytd
- New high beta vs low beta near new high
The year has not been less than a wild ride for American equity, with the S&P 500 starting with more than 21% of the high of February, during the second week of April. Tariff uncertainty left the early stages of the celloff, while the “liberation day” declaration of administration caused the most extreme instability and negative speed. Due to the stress in the disgrace of the financial system, the administration quickly reversed the course by postponing the “mutual tariff” for 90 days. After 12 weeks in Q2, a broad V-shaped rally supported to indicate a healthy economy with a leadership profile (Technology, Industrial, Financial) in the new all-time high for S&P 500 and NASDAQ 100.
After a total return of 6.3% in May, S&P 500 5.1% in June increased to its first consecutive monthly benefit since September 2024. Its 11.7% return to May and June was the best two -month return since December 2023. A 20% decline in April and a wide range ran away from a monthly. Similarly, 17.8% of the high-nimine limit was the widest since April 2020.
From a technical perspective seen in the monthly duration chart below S&P 500, the low of April came within January 2022 within the pre -cyclic high to 0.3%, as a classic “Rtiest” of a expected support level. The April Open-Close range received another support from the growing trendline connecting 2020 and 2022 cycling climbing. The rally in May and June confirmed the rapidly reverse pattern (dragonfall doji) of April at the new high level.
Under the hood of the US Equity Benchmark, the overturning and overall quarter performance from April’s climb was led by Large-Cap Growth (+17.8% Q2) and Small-Cap Growth (+12% Q2).
At the large-cap sector level, technology (+23.7% Q2) and communication (+18.5%) led the outparforma, while energy (-8.6% Q2) and healthcare (-7.2% Q2) weakened from depth. In particular, energy and healthcare Q1 had top performing areas.
Along with technology and communication, the new height was delivered by industrial and financial sectors, suggesting that the economy is strong and better than expected amidst widespread uncertainty.
Similarly, technology (+22.8% Q2) was the top performance area between small cap, followed by industrial (+15.4% Q2) and ingredients+13% Q2). Reits (-2.2% Q2) and staples (-2% Q2) were lagard.
Rates and US dollars are a tailwind for high levels in equity, gold and bitcoins. UST 10YR yielded 1H of 2025 declined by 31bps and the cycle remained 76 base points (BPS) below high (5.02%), reaching the end of 2023. Greenback declines has been more dramatic with a decline of 10.7% in 1h 2025 with a US dollar index (DXY). (-11.2%) and February 2004 (-11%).
In Q2, gold increased by 5% while bitcoin increased by 30%. In the first half of 2025, gold increased by 26%, while bitcoin achieved 15%.
Q2 confirms rapidly reversal S&P 500 High Beta Index vs. & P 500 is the relative power of the low volatility index, which ended on June near record levels.
The corporate income season is around the corner. According to the factset, the estimated S&P500 income growth rate (YOY) for the Q2 2025 is currently 5%, below the expectations of 9.4% in the beginning of Q2. Q2 2025 S & P 500 revenue is expected to increase 4.2%, which is below 4.7% expectations at the beginning of Q2. The 12 -month PE ratio of S&P 500 is 21.9 vs. 5YR and 10YR average 19.9 and 18.4 respectively.
looking ahead
The market will converge as a range of uncertainty in Q3 as business tension, geo -political conflict and economic crosscrant. On July 9, the termination of mutual tariff adjudication is large, with some trade deals, now tariffs targets targeting consumer goods are safe and extended tariffs. While the tariff can be postponed further on 9 July, uncertainty remains. The Fed faces a delicate balance act that is constantly looking at the consistent claims and a constant trend at the risk of inflation. Currently, Fed and Bond are in market sinks and estimate the rate of two 25bp rates by the end of 2025.
The information contained here is provided only for informative and educational purposes, and nothing vested here should be done as an investment advice on behalf of any particular security or overall investment strategy. All the information vested here is considered accurate and reliable by Nasdaq by Nasdaq. However, all information is provided “like” without any kind of warranty. Advice from securities professional is strongly advised.
