WEEKLY MARKET RECAP – JUNE 27, 2025

U.S. stocks rallied sharply last week, with the three major indexes climbing roughly 4% as easing oil prices and reduced trade tensions buoyed investor confidence. On Friday, the S&P 500 surpassed the record it set four months ago, and the NASDAQ exceeded its previous peak from last December. The Dow, while gaining ground, remained nearly 3% below its all-time high.

U.S. Treasury yields declined for the third straight week, with shorter-term maturities seeing the steepest drops. The 10-year Treasury yield fell to 4.28% by Friday afternoon, down from a recent high of 4.60% on May 21.

Oil prices pulled back significantly, with U.S. crude settling around $65 per barrel—down 11% for the week—as geopolitical tensions in the Middle East cooled, reducing fears of supply disruptions. Just ten days earlier, prices had topped $75.

Investor sentiment also improved following positive updates on trade negotiations between the U.S., China, and the European Union ahead of the July 9 reciprocal tariff deadline. However, talks with Canada were cut off Friday afternoon amid disputes over dairy tariffs and a proposed digital services tax.

The U.S. economy’s first-quarter performance was revised downward, with updated data on Thursday showing GDP contracted at a 0.5% annualized rate—worse than the previously reported 0.2% decline. This marks the first negative quarterly GDP reading since early 2022. By contrast, Q4 2024 saw 2.4% growth.

The Cboe Volatility Index (VIX), which gauges investor expectations for short-term market swings, ended the week at 16.3—slightly below its year-end 2024 level of 17.4 and down sharply from the 2025 peak of 52.3 set in early April.

Inflation ticked higher in May, based on the Personal Consumption Expenditures (PCE) Index. Core PCE, which excludes food and energy, rose at a 2.7% annual rate—above economists’ expectations and April’s 2.5% reading. Monthly inflation came in at 0.2%, also topping forecasts of 0.1%.

Looking ahead, Thursday’s upcoming jobs report will offer insight into whether the recent streak of moderate but stronger-than-expected job growth extended into June. In May, the economy added 139,000 jobs—beating expectations—but earlier job estimates for March and April were revised downward. Markets will be closed Friday in observance of the Independence Day holiday.