July 2025 saw the US equity rally broaden and consolidate, with major indices holding near record highs as resilient corporate earnings, stabilizing economic data, and further de-escalation in global conflicts supported risk appetite. While gains were less dramatic than in June, the S&P 500 and Nasdaq remained in positive territory, bolstered by continued leadership from megacap tech and AI stocks and a rebound in small and mid-cap shares. The Federal Reserve maintained a cautious tone, keeping rates steady as inflation showed tentative signs of moderation and the labor market stabilized after June’s soft patch. Market participants grew more optimistic about a potential rate cut in the second half of the year, especially with consumer spending steadying and housing data firming, driving additional flows into rate-sensitive and cyclical sectors.

In June 2025, the US stock market rebounded to reach all-time highs, with the S&P 500 climbing over 5% and the Nasdaq surging more than 6% as trade tensions eased and volatility receded. The primary driver behind this rally was a temporary truce in the ongoing US-China tariff standoff, which brought short-term optimism and triggered a strong advance in tech and AI-related sectors—the main engines of market gains throughout the month. Volatility measures, elevated earlier in the year due to new and aggressive tariffs imposed by the Trump administration, markedly decreased as investor confidence improved. Macroeconomic signals were more mixed: While equity markets benefited from hopes of de-escalating trade wars and robust tech earnings, underlying economic growth slowed, with US GDP projections reduced and inflation remaining persistently high. Unemployment also began to trend upwards, placing some pressure on Federal Reserve policy, though rates remained unchanged with policymakers cautious about cutting prematurely.