WEEK IN PERSPECTIVE: A busy week ends on a record-high note

Wall Street Soars as Ceasefire, Fed Signals, and Earnings Fuel Rally

U.S. equity markets wrapped up a blockbuster week, with the S&P 500 and Nasdaq Composite notching fresh record highs amid a convergence of calming geopolitical tensions, upbeat corporate earnings, dovish signals from the Federal Reserve, and better-than-expected economic data.

Ceasefire Calms Geopolitical Jitters

The week began on edge after reports that the U.S. had destroyed three Iranian nuclear sites in a preemptive strike. However, tensions quickly eased as Iran signaled to Qatar its intention to stage a limited counterattack on a U.S. airbase—perceived by investors as a calculated move that left room for diplomacy. President Trump later announced a ceasefire between Israel and Iran. Despite an initial breach, the truce held, helping lift investor sentiment.

Fed Opens Door to Possible Rate Cuts

Monetary policy moved into the spotlight Tuesday as Fed Chair Jerome Powell delivered his semiannual testimony before Congress. While maintaining a patient stance, Powell acknowledged the possibility of lower-than-expected inflation, hinting that rate cuts may be on the table sooner than anticipated.

His remarks followed comments from Fed Governor Michelle Bowman, who suggested she could support a July cut if inflation remains subdued. Optimism around easing monetary conditions rose further following a report from The Wall Street Journal that President Trump may name Powell’s replacement as early as September—another sign of potential policy shifts ahead of the 2026 transition.

Mega-Cap Momentum Drives Market Gains

Market breadth was strong, but it was the mega-cap technology names that led the charge. The Vanguard Mega-Cap Growth ETF (MGK) surged 4.7%, reflecting solid gains across communication services (+6.2%), information technology (+4.7%), and consumer discretionary (+4.4%).

Semiconductors were especially hot. Micron’s standout earnings and bullish outlook helped propel the Philadelphia Semiconductor Index 6.4% higher on the week, up nearly 30% in Q2. NVIDIA, now the most valuable company in the S&P 500 by market cap, shattered records and dominated headlines.

Breadth Beyond Tech

Despite the dominance of mega-caps, market strength extended to small- and mid-cap names, with value and growth stocks alike participating in the rally—a sign of improving investor confidence in broader economic stability.

Energy Slumps as Oil Tumbles

The energy sector was the lone standout on the downside, falling 3.5% as oil prices retreated 12% to $65.07 per barrel. The Israel-Iran ceasefire helped alleviate fears of a supply disruption in the Middle East. Real estate also underperformed (-0.8%), weighed down by weak new and existing home sales reports.

Economic Data Delivers Mixed Messages

The macroeconomic picture was a patchwork of strengths and concerns:

• Consumer confidence slipped in June

• Durable goods orders surged in May

• Initial jobless claims edged lower

• Q1 GDP was revised downward

• Real personal spending declined

• Both headline and core PCE inflation ticked up slightly year over year

Still, signs of underlying resilience supported a bullish tone, with investors seemingly unfazed by short-term data noise.

Consumer Discretionary Stocks Sparkle

Consumer discretionary stocks bucked the spending data gloom. Nike jumped 15% following an impressive earnings release, and Carnival buoyed the sector earlier in the week with its own positive outlook.

Trade Flare-Up Fails to Dampen Rally

Markets absorbed a late-week jolt after President Trump ended trade talks with Canada over its dairy tariffs and digital services tax. Stocks briefly dipped on the news before bouncing back as bargain hunters stepped in—yet another testament to the current "buy-the-dip" mindset prevailing on Wall Street.

"One Big, Beautiful Bill" in Focus

Legislative developments also made headlines. The Senate continued discussions on the so-called “One Big, Beautiful Bill,” with leadership aiming for a vote before the weekend. Treasury Secretary Bessent struck a confident tone, telling CNBC the bill is likely to reach the president’s desk by July 4.

Weekly Market Scorecard

Index	Weekly Performance	YTD Change
Nasdaq	+4.2%	+5.0%
S&P 500	+3.4%	+5.0%
Dow Jones	+3.8%	+3.0%
Russell 2000	+3.0%	-2.6%
S&P MidCap 400	+2.6%	-0.6%

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