From Yahoo Finance: 2025-06-27 16:44:00

Wall Street celebrates with the best cross-asset advance in over a year, fueled by reduced fears of a global trade war. The S&P 500 hits a record high amid investor optimism, despite concerns over the economy, valuations, and government policy. Bulls are banking on cooling inflation and improving consumer sentiment.

Market volatility has disappeared, prompting a rush into riskier investments. Retail traders and systematic investors are jumping in, driven by optimism for positive economic news. Concerns remain, with some predicting a 40% chance of recession due to tariffs and weakening household spending.

US consumer sentiment rises in June, but data shows a mixed economic picture. New home purchases decline, jobless claims rise, and consumer spending falls sharply. Fed Chair Powell cites trade policy uncertainty for holding back interest rate cuts. Despite these concerns, the S&P 500 reaches a record high.

Investors double down on risky bets, driving the S&P 500 to a 3.4% surge and record high close. Junk bonds rise for the fifth week, while Treasury yields drop. Cryptocurrencies and commodities also see gains, with the best monthly performance in over a year across various asset classes.

Volatility-controlled products increase exposure, signaling a significant buying spree. Quants increase long exposure to stocks after a brief downturn. However, some warn of precarious positioning for investors following a volatile quarter. Popular speculative funds show signs of caution, with traders seeking downside insurance.

CIO of Northwestern Mutual Wealth Management Company, Brent Schutte, avoids chasing the market bounce due to high S&P 500 valuations. He favors cheaper small and mid-cap stocks. Despite weaker data, the “buy the dip” mentality persists, as many disregard warning signals of economic contraction.



Read more at Yahoo Finance: Wall Street’s Booming June Is Big Bet Against Economy Doomsayers