1. U.S. Stock Markets Surge to New Highs#

S&P 500 and Nasdaq reach record closing highs, fuelled by optimism surrounding U.S.–China trade negotiations—particularly on rare‑earth exports—and growing expectations of Federal Reserve interest rate cuts oaicite:1.
The Nasdaq officially enters bull market territory, and the Dow edges closer to its all-time high; trading volume rose to ~22.1B shares, above its 20-day average oaicite:2.
Fed rate-cut expectations jump: ~56% probability of at least three quarter-point cuts by end‑2025, versus ~31% last week oaicite:3.

Sector Review#

Consumer discretionary stocks lead the rally.
Energy stocks lag behind.
Key movers: Nike up ~15% intraday; Nvidia nears a $4 trillion market cap on strong AI sentiment oaicite:4.

U.S.–China trade deal on rare-earth shipments alleviates supply chain concerns oaicite:5.
Middle East détente—a cooling of tensions between Israel and Iran—supports equity and energy markets; oil prices ease and bond yields decline oaicite:6.
Tariff shifts: Trump halts trade talks with Canada, focuses on rare-earths deal, raising questions on broader trade policy oaicite:7.

May PCE inflation remains subdued: +0.1% MoM (core +0.1%), maintaining annual core around +2.5% oaicite:8.
Real consumer spending drops 0.3% in May—a first decline this year oaicite:9.
Consumer income dips 0.4% MoM oaicite:10.

Sentiment rebounds to 60.7 in June (from 52.2 in May), marking a 16.3% gain—the largest monthly rise in over 30 years oaicite:11.
- Current Conditions up to 64.8 (+10% MoM).
- Expectations index climbs to 58.1 (+21%) oaicite:12.
- One-year inflation expectations tumble from 6.6% to ~5%; longer-term expectations ease slightly oaicite:13.
However, sentiment is still ~18% below December 2024 levels; lingering uncertainty around tariffs and jobs restrains confidence oaicite:14.

June FOMC meeting: Fed maintains rates at 4.25–4.50%; SEP forecasts two quarter-point cuts by year-end—even as seven members expect no rate moves in 2025 oaicite:15.
Powell emphasizes patience and data-dependence, citing ongoing tariff impacts oaicite:16.
Board dissent: Governors Waller and Bowman signal openness to a July cut if data allows oaicite:17.
Long-term inflation uncertainty is debated within the Fed, with Michigan survey concerns conflicting with market-based measures oaicite:18.

Shares surge ~11–15% after reports show Nike will reduce dependence on China production, cutting U.S.-bound China sourcing from 16% to below 10% by May 2026 oaicite:19.
Q4 revenue declines less than expected; company offsets $1B tariff cost via price increases and supply-chain adjustments oaicite:20.

Mixed week: while robotaxi launch in Texas gave an initial boost, Tesla shares declined recently due to softer European sales and lingering fallout from public disputes oaicite:21.

Shares slide by ~4% in extended trading after disappointing quarterly guidance oaicite:22.

Monetary policy theme: key releases ahead include June PCE and PMI data, plus Powell and other Fed speakers. Markets are now pricing in rate cuts beginning September.
Consumer resilience: sentiment rebound contrasts with cooling spending—signals to watch include wage trends, employment data, and spending momentum.
Trade and globalization: developments in U.S.–China rare-earth alliances, shifting manufacturing strategies, and new tariff moves remain central.
Earnings season ahead: upcoming results from Tesla deliveries, Micron, Apple, and labor reports (jobs, ISM) will shape narrative.

Bullish equity markets are underpinned by dovish Fed pivot hopes, trade optimism, and rebounding consumer sentiment.
Inflation is moderating, but Fed remains cautious given lagged tariff effects—real data drives future rate moves.
Consumer mood is improving, but confidence remains fragile amid economic uncertainty.
Corporate strategy shifts reflect supply-chain adaptation to tariff regime (Nike) and continued execution risk (FedEx, Tesla).

June PCE inflation report (core & headline).
PMI readings, ADP jobs, and nonfarm payrolls.
Fed testimony from Powell and possible speeches by Waller, Bowman.
Q2 delivery numbers from Tesla and Chinese EV rivals.
Trade developments: rare-earth volume, tariff policy updates, global sourcing shifts.