Weekly Market Summary: Wall Street Hits Records Amid U.S.-China Agreement

Weekly Market Summary: Wall Street Hits Records Amid U.S.-China Agreement

S&P 500 and Nasdaq: New All-Time Highs Despite Tensions with Canada

Performance of Major Stock Market Indexes

The U.S. stock market closed the week on a positive note, reaching new all-time highs for the main indexes, driven by encouraging news on international trade.

• The S&P 500 rose by 0.52% to 6,173.07 points, setting a new record after reaching an intraday high of 6,187.68.
• The Nasdaq Composite also hit a milestone, closing at 20,273.46 points.
• The Dow Jones Industrial Average added 432.43 points, or 1%, to finish at 43,819.27.

These gains represent a notable recovery from the lows seen in April, when the market had recorded a decline of nearly 18% year-to-date. Since then, the S&P 500 has rebounded more than 20%, supported by key geopolitical and sector-specific factors.

Reaction to Trump’s Statements on Canada

However, the day was not without volatility. President Donald Trump surprised markets by announcing on his Truth Social network the suspension of trade negotiations with Canada, which caused a temporary dip in stock prices.

Despite the initial impact, investors managed to digest the news, and the market resumed its upward trend thanks to more constructive signals from other international fronts.

Commerce Secretary Howard Lutnick confirmed that the United States and China had finalized a trade framework agreement, which strengthened bullish sentiment on Wall Street. He also hinted at imminent agreements with at least ten other trade partners.

Impact of the U.S.-China Agreement on the Market Rebound

The recent agreement between Washington and Beijing has been interpreted as a clear sign of de-escalation in trade tensions, which reduced the perception of systemic risk in the markets.

This strategic shift by the Trump administration—abandoning the more aggressive tariff measures imposed earlier in the year—has been key to the sustained recovery of the stock indexes.

Additionally, analysts point out that the rebound is tied to a renewed appetite for risk assets, fueled by expectations of domestic economic growth and the stabilization of external factors such as the conflict in the Middle East and monetary tensions.

U.S. Consumer Sentiment and Economic Data

Confidence Rises Despite Decline in Personal Income

Despite mixed signals in economic indicators, U.S. consumer sentiment showed a significant improvement.
The University of Michigan index rose to 60.7 points in June, driven by a more favorable outlook on personal finances and future economic conditions.

This rebound in confidence contrasts with less encouraging data on income and spending. In May, personal income fell by 0.4%, while personal spending declined by 0.1%, reflecting a slowdown in consumption following early purchases ahead of the imposition of tariffs.

Persistent Inflationary Pressures

At the same time, inflation indicators continue to show a sustained upward trend. Both the PCE Price Index and its core version (core PCE) posted year-over-year increases, suggesting that inflationary pressures continue to affect the domestic economy.

These figures reinforce the narrative of a complex economic environment, where improving consumer confidence coexists with a slowdown in real income and persistent inflation that erodes purchasing power.

Impact on Interest Rate Expectations

In light of this scenario, financial market participants are adjusting their expectations regarding monetary policy.
It is estimated that the Federal Reserve could cut interest rates by 75 basis points in 2025, likely starting in September. This measure aims to stimulate consumption and ease tensions in the credit market.

The prospect of a more flexible Fed coincides with an environment of reduced international uncertainty, which supports the return of capital to riskier assets and the rebound of major stock indexes.

Europe and Bonds: Rally Driven by Trade Confidence

Gains in European Indexes

European stock markets ended the week higher, reflecting renewed optimism from easing trade tensions between the United States and China.

• The Stoxx Europe 600 rose 1.1%, solidifying its position above key technical levels.

Regarding national indexes:

• The UK’s FTSE 100 advanced 0.7%.
• Germany’s DAX rose 1.5%.
• France’s CAC 40 appreciated 1.8%.

This improvement was led by the automotive sector, one of the most sensitive to international supply chains and tariffs.

Surge in Automakers and Banks

Shares of automobile manufacturers stood out among the day’s top gainers, benefiting from the perception that supply chains could stabilize in a lower-friction trade environment.

Bank stocks also joined the rally: Barclays and Deutsche Bank reached highs not seen in a decade, driven by rising bond yields and the momentum of European capital markets.

This dual boost—both sectoral and macroeconomic—suggests that risk appetite has also shifted to the Old Continent, where investors are seeking opportunities in cyclical sectors with attractive valuations.

Bund Performance and Fiscal Expectations

In the fixed-income market, German government bonds reflected a significant rise in yields. The 10-year Bund closed at 2.587%, marking a weekly increase of 3.3%, the steepest since March.

This movement is partly driven by expectations of increased public borrowing by the German government, which raises the supply of sovereign debt and puts upward pressure on rates.

At the same time, negotiations in the U.S. Senate over the so-called “One Big, Beautiful Bill” also had international repercussions, as the bill includes proposed changes to the SALT deduction cap, with potential fiscal implications.

U.S. Dollar and Precious Metals: Downward Pressure from Lower Uncertainty

Dollar Weakness Against Major Currencies

The U.S. dollar showed broad weakness throughout the week, reaching levels not seen in over three and a half years against currencies such as the euro and the British pound.
The Dollar Index fell 0.03% to 97.34 points, marking its worst start to a year since the free-floating exchange rate system was introduced in the 1970s.

• Against the Swiss franc (CHFUSD), the dollar slipped 0.08%.
• The Japanese yen (USDJPD) rose slightly by 0.21%, reaching 144.68.
• The euro (EURUSD) climbed to $1.1707, driven by an unexpected rise in consumer prices in France, which added further pressure on the greenback.

The dollar’s weakness is linked both to expectations of a Federal Reserve rate cut and to a more stable geopolitical environment, which reduces demand for safe-haven assets.

Gold and Silver Drop as Safe-Haven Appeal Fades

In line with reduced risk aversion, gold fell by 2%, reaching its lowest level in nearly a month. The precious metal dropped to $3,273.43 per ounce, with U.S. futures closing at $3,287.60.

This marks the second consecutive week of losses, with a weekly decline of 2.8%.
Silver also fell 1.4% to $36.10, while platinum dropped 5.3%.
Only palladium managed to close the week with a 0.5% gain, marking its second straight weekly increase.

Analysts note that the easing of tensions between the U.S. and China, as well as the ongoing ceasefire between Iran and Israel, have weakened global risk perceptions, thereby reducing demand for gold as a safe-haven asset.

Expectations for Federal Reserve Monetary Policy

At the macroeconomic level, recent data point to a slowdown in personal spending and income in the U.S., which has strengthened market expectations that the Federal Reserve will cut interest rates by 75 basis points in 2025, likely starting in September.

The combination of a weaker dollar, potentially lower interest rates, and geopolitical stability creates a less favorable environment for precious metals, which do not yield returns and often compete with other assets during periods of monetary policy normalization.

Oil: Stabilization After Declines and OPEC+ Decisions

Price Volatility and Projected Output

The oil market experienced a highly volatile week, marked by a cumulative 12% drop—the steepest since March 2023. However, by Friday’s close, prices managed to stabilize following news that OPEC+ plans to increase production starting in August.

• Brent closed at $67.77 per barrel, with a marginal gain of 0.1%.
• West Texas Intermediate (WTI) ended at $65.52, rising 0.4%.

The announcement of a 411,000 barrels per day increase—similar to the hike scheduled for July—initially triggered a sharp intraday drop before the market regained some ground.

Analysts caution that while the supply adjustment exerts downward pressure on prices, there are also signs of recovering demand that could help support values in the short term.

Impact of the Iran-Israel Ceasefire

One of the factors contributing to the recent weakness in crude oil was the ceasefire between Iran and Israel, announced by President Trump. The conflict had temporarily driven prices above $80 per barrel, but confirmation of the ceasefire removed much of the geopolitical risk premium priced into the market.

This allowed investors to shift their focus back to supply and demand fundamentals, setting aside war-related risk premiums.

Inventory Trends and Chinese Exports

In addition to OPEC+ moves, oil prices found support from positive data on inventories and exports. Weekly reports from the U.S. showed declines in middle distillate reserves, indicating more active energy consumption.

At the same time, inventories fell in the Amsterdam-Rotterdam-Antwerp (ARA) hubs and in Singapore, coinciding with a rise in exports.

Meanwhile, China increased its imports of Iranian crude, reaching a record 1.8 million barrels per day between June 1 and 20.
This surge was driven by stronger demand from China’s independent refineries, cementing China’s position as the world’s largest buyer of Iranian oil.

Technology and Consumer Sectors Lead Market Recovery

Tech Sector Boost: Nvidia and Microsoft

The rebound in U.S. stock markets has been closely tied to the performance of the technology sector, particularly key players in the artificial intelligence space. Nvidia (NVDA) and Microsoft (MSFT) have been central to this bullish phase, attracting investor interest and reigniting appetite for growth assets.

Both companies have led the recovery rally since April, serving as benchmarks for the optimistic narrative driving the market.

AI enthusiasm, combined with strong financial results and global expansion forecasts, has made these firms major drivers of the stock market’s momentum.

Nike Case: Tariff Strategy and 15% Surge

Another standout case was Nike (NKE), whose shares soared 15.19% following the release of a favorable earnings report. Despite the tariff environment, the company demonstrated resilience through a strategic reconfiguration of its supply chain.

The plan to reduce its dependence on Chinese manufacturing and shift operations to other countries was well received by analysts.

Nike also announced logistics optimization measures to mitigate an estimated $1 billion tariff impact.
This positive stock market reaction reflects investor confidence in the company’s adaptability and long-term sustainability.

Other Notable Moves: Unilever, Boeing, and Li Auto

Beyond the technology and consumer sectors, several other companies caught investors’ attention. Unilever (UL) announced the acquisition of men’s personal care brand Dr. Squatch for $1.5 billion, aiming to expand its reach among Millennial and Gen Z consumers. The brand is expected to exceed $400 million in annual revenue.

In the aerospace sector, Boeing (BA) received a rating upgrade with a price target of $275, driven by improvements in its production processes and expectations of increased deliveries for its 737 and 787 models.

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