June, Second Quarter 2025 Review and Outlook

From Nasdaq: 2025-07-01 15:30:00

In Q2, the S&P 500 and Nasdaq 100 hit new all-time highs, signaling economic strength. The U.S. Dollar Index saw its biggest decline in 16 years. S&P 500 corporate EPS is expected to grow 5% in Q2 2025, with nine out of 11 large-cap sectors positive YTD. High beta vs. low beta is near new highs.

After a turbulent start, U.S. equities rebounded in Q2 with the S&P 500 rising 5.1% in June. Large-cap growth and small-cap growth led the recovery, while Technology and Communications outperformed. Energy and Healthcare sectors underperformed, while Industrials and Financials reached new highs, suggesting a strong economy.

In the small-cap sector, Technology was the top performer in Q2, followed by Industrials and Materials. Rates and the U.S. Dollar were tailwinds for equities, gold, and bitcoin, with the U.S. Dollar Index declining 10.7% in 1H 2025. Gold rose 5% in Q2, and bitcoin surged 30%.

The S&P 500 High Beta Index outperformed the S&P 500 Low Volatility Index in Q2, confirming a bullish reversal. Corporate earnings for Q2 2025 are forecasted to grow 5%, down from initial expectations. Trade tensions, geopolitical conflict, and economic uncertainties will impact markets in Q3, with the Fed expected to cut rates by year end.



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