Overview
Markets advanced in June, recovering from early volatility tied to renewed tariff tensions and geopolitical instability. Mid-month softness gave way to strength, as firm labor data, easing inflation, and expectations of a steady Federal Reserve helped lift sentiment into quarter-end.
U.S. Market Performance & Policy
Equities posted solid gains, with the S&P 500 surpassing 6,000 mid-month. Mega-cap tech continued to lead, while broader strength emerged in healthcare and industrials. The Federal Reserve kept rates unchanged at 4.25–4.50%, maintaining a data-driven stance. Markets began to price in a higher likelihood of a policy shift later in the year, as inflation indicators cooled and economic growth remained uneven. Key Economic Data (U.S.)
Fed Funds Rate: 4.33% (unchanged in June)
Unemployment: 4.2% (steady from May) M2 Money Supply: $22.0 trillion (rising gradually)
Consumer Confidence: Fell to 93.0
Core PCE Inflation: +0.2% month-over-month; 2.8% year-over-year
GDP (Q1 final): Contracted -0.5% annualized
Despite a negative Q1 GDP revision, household spending and labor markets remained stable, helping offset broader concerns about slowing output.
Consumer & Corporate Trends
Consumer confidence declined for a second straight month, reflecting concern over prices and geopolitical headlines. However, spending on essentials and services held firm. Corporate earnings were mixed, with strength in tech and communications. Oil prices rose amid global conflict, lifting energy stocks. Tariff tensions and weak manufacturing sentiment weighed on outlooks in export-driven sectors.
Canadian Market Update
The S&P/TSX Composite rose by approximately 2.6% in June, driven by gains in energy, healthcare, and financials. Headline inflation cooled to 1.7%, and the Bank of Canada held rates steady. Manufacturing data remained soft, and unemployment ticked up to 7.0% as exports weakened under new U.S. tariff measures. Housing remained resilient in major markets, though activity moderated. Investor attention turned to Bank of Canada guidance amid mounting pressure from slowing global trade.
Outlook
In the U.S., steady employment and cooling inflation support cautious optimism, though weak growth and softening sentiment warrant attention. In Canada, strong equity performance and central bank flexibility offer stability, but trade tensions and labor softness remain key risks.