Stock Market Update Friday June 27, 2025

Stock Market Update Friday June 27, 2025 Equities notched fresh all-time highs twice during today’s session, as bullish momentum carried over from earlier in the week. A strong open saw broad-based buying push major indices decisively into record territory. However, sentiment briefly wavered late in the day following a combative tweet targeting Canada, reigniting concerns over unresolved trade tensions. Still, the pullback proved fleeting, as dip buyers swiftly reasserted control, driving the S&P 500 (SPX) to close at a new historical high.

By the closing bell:

• S&P 500 (SPX): +0.5%

• Nasdaq-100 (QQQ): +0.4%

• Russell 2000 (IWM): flat

Away From Stocks: U.S. Treasurys faced modest selling pressure, with yields on the 2-year and 30-year notes ticking up 3 and 4 basis points, respectively, to 3.73% and 4.85%, reflecting a modest bear steepening of the yield curve.

In commodities, WTI crude held steady at $65/barrel, while gold sold off sharply, dropping nearly 2% to $3,273/oz, likely amid rising real yields and reduced haven demand.

Meanwhile, Bitcoin remained rangebound near $107,000, and the CBOE Volatility Index (VIX) eased, settling in the low 16s — signaling a generally risk-on tone despite intraday geopolitical jitters.

Nvidia Daily Stock Chart

U.S. Growth Contracts as Spending Slows and Inflation Surprises

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Personal income and consumer spending both posted unexpected declines, with monthly spending registering its second consecutive negative reading. At the same time, core PCE inflation—the Federal Reserve’s preferred gauge—surprised to the upside, complicating the policy outlook.

The broader economic picture darkened as U.S. GDP contracted by 0.5% in Q1, a sharp reversal from the 2.4% expansion in Q4 2024. The downturn was driven in large part by a 37.9% spike in imports—the largest since 2020—as businesses and consumers front-loaded purchases ahead of expected tariff hikes.

Despite the contraction, the Atlanta Fed projects a rebound to 3.4% GDP growth in the second quarter. Still, persistent trade frictions and declining consumer sentiment are fueling expectations that the Federal Reserve may move to cut interest rates in the near term to stabilize growth.

Congressional Leaders Strike SALT Deal, But Budget Negotiations Remain Contentious

Today, Congressional leaders announced a breakthrough on one of the thorniest fiscal flashpoints in ongoing negotiations: the cap on state and local tax (SALT) deductions. The 2017 Tax Cuts and Jobs Act, passed under the Trump administration, imposed a $10,000 ceiling on SALT deductions, disproportionately impacting taxpayers in high-tax states like New York, California, and New Jersey.

Facing pressure from Republican House members representing those states, negotiators agreed to raise the SALT cap to $40,000. The expanded deduction, however, is temporary and will sunset after four years. The so-called “SALT Caucus” has indicated it will support the compromise, clearing a key hurdle for House passage.

Still, deep divisions remain. Several GOP lawmakers from lower-income districts continue to object to House-passed cuts to Medicaid and the Supplemental Nutrition Assistance Program (SNAP), arguing the reductions would disproportionately burden vulnerable constituents.

Meanwhile, in the Senate, a handful of Republicans are pushing back against efforts to eliminate or scale back clean energy tax credits enacted during the Biden administration. These lawmakers, some from states with strong renewable energy sectors, are advocating to preserve incentives tied to solar, wind, and other alternative energy investments.

The Senate has pledged to work through the weekend to reconcile these disputes and finalize a legislative package. The goal is to send a negotiated bill back to the House early next week, paving the way for a July 4 signing ceremony at the White House. The clock is ticking—and while the path forward remains uncertain, lawmakers are feeling the pressure as the legislative session barrels toward a holiday deadline.

Bottom Line:

Our proprietary algorithm has issued weekly buy signals across four of the five major U.S. equity benchmarks—the S&P 500 (SPY), Nasdaq-100 (QQQ), Russell 2000 (IWM), and Dow Jones Industrial Average (DIA). Tuesday, April 29, 2025, we have IWM & RSP ETFs; the two are the most important indexes to give buy signals. Now, we have all five major indexes with buy signals generated from our proprietary algorithm. Monday, April 28, 2025, we had a buy signal generated from our proprietary algorithm for the Dow Jones ETF DIA on the daily chart. The market structure continues to improve, breadth thrusts confirm internal strength, and technical conditions suggest that while short-term upside could be capped, the path of least resistance remains higher. April 25, 2025 Technical Outlook: SPY, QQQ, and DIA have daily buy signals. Sector ETFs (XLK, AIQ, SMH, XLY) have triggered buy signals. April 24, 2025, VIX has a daily sell signal (bullish for equities), as do Bitcoin and Apple. W.D. Gann Cycle Pivot Date: S&P 500 on Saturday, April 5, 2025. Historically, these cycle dates often coincide with significant inflection points in price action. While the market will be closed on Saturday, we will be watching for a potential pivot either into Friday’s close or by Monday’s session. Weekly sell signals persist across all five major indexes.