To The Moon

Markets Edge Higher, But Miss Record Highs

The major U.S. stock indexes flirted with record territory on Thursday but couldn't quite seal the deal:

Index Daily Gain Notable: $S&P 500(.SPX)$ +0.8% 2nd highest close in history. $NASDAQ(.IXIC)$ +1.0% Briefly broke its record intraday. Dow Jones Industrial Average +0.9% Led by industrials and financials

Despite the last-minute pullback, June has been a strong month for equities:

• S&P 500: +3.9%

• Nasdaq: +5.5% $NVIDIA(NVDA)$ $Tesla Motors(TSLA)$ $Circle Internet Corp.(CRCL)$

• Dow: +2.6%

This builds on May’s powerful rebound, the best May for the S&P 500 in 35 years, and reflects investor resilience in the face of trade and economic uncertainty.

The Next Big Catalyst: Earnings or Tariffs?

Investors are looking ahead to Q2 earnings season, set to kick off in mid-July, as a potential driver for further gains.

Meanwhile, the Trump administration’s July 9 tariff deadline looms large. Markets appear to be pricing in the assumption that tariff hikes will be postponed again, especially following comments from Council of Economic Advisers Chair Stephen Miran suggesting flexibility for countries negotiating “in good faith.”

But the risk remains that tariffs are imposed, potentially up to 50% on some EU goods, if talks stall.

Consumer Spending Softens

New data shows a notable deceleration in U.S. consumer activity:

Consumer

• Q1 consumer spending grew just 0.5%, down from the previously reported 1.2%.

• Spending on services contributed 0.3 percentage points to GDP, the lowest since Q2 2020.

• The GDP was revised down to a -0.5% annualized pace.

Gasoline demand has shown modest improvement recently, but overall spending remains muted, particularly in discretionary areas like home improvement and autos.

Labor Market Still Mixed

• Initial jobless claims edged down slightly last week.

• Continuing claims are rising, suggesting slower hiring.

• The gap in wage growth between job switchers and stayers is at its narrowest in 15 years, showing diminished labor market mobility.

Job

• This labor softness is likely reinforcing Chair Powell’s cautious stance on rate cuts. Despite recent inflation moderation, core PCE is expected to rise to 2.6% YoY in Friday’s report, still above the Fed’s target.

Global Dynamics: EU Trade Moves & IPO Revival

• The EU is offering tariff concessions and expanded U.S. purchases (LNG, industrial goods) to secure a deal before July 9.

• IPO markets are stirring: This year’s U.S. IPOs are up 52.8% on average, driving hopes for stronger activity in H2, especially in fintech and digital assets.

Conclusion: Optimism... With a Caution Label

Markets are riding a wave of technical strength, solidified by cooling geopolitical tensions and positive seasonal momentum. But valuation levels are stretched, and macro risks remain unresolved, particularly tariffs, earnings surprises, and consumer fatigue.

Consumer

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This summary is for informational purposes only and does not constitute financial advice. Investors should conduct their own research before making investment decisions.