S&P 500 Scales New Record High Close with U.S.-China Trade Deal

The S&P 500 (Index: SPX) reached a new record high close on Friday, 27 June 2025, almost four months after it last set a new record. The index closed out the trading week at 6,173.10. The index rose 3.4% higher than it finished the preceding week.

The catalyst of the event was the announcement the U.S. and China had reached a trade deal during the week.

It could have been even bigger, but the news that the U.S. suspended trade deal talks with Canada knocked the index below its intraday trading high.

Even so, the S&P 500 muscled its way to a new record close. The latest update of the alternative futures chart finds that as the 2025-Q2 calendar quarter comes to an end, investors are focusing on the more distant future quarter of 2025-Q4 in setting stock prices, with the S&P 500′s trajectory running in the lower portion of the forecast range for this quarter:

While the news of the trade deals capped off the week that was, they were far from the only market-moving headlines for the week. The positive outcome of the U.S.’ attack on Iranian uranium enrichment facilities over the preceding weekend and the resulting cease fire between the Israel and Iran got the week off to strong start on the geopolitical front. In between that event and the trade-related news on Friday, much attention was given to what the Federal Reserve will be doing with U.S. interest rates in the second half of 2025. Here are the week’s market moving headlines:

Monday, 23 June 2025

• Signs and portents for the U.S. economy:

• US attack on Iran adds to economic uncertainty
• Oil settles down 7% after Iran attacks US military base in Qatar, not tankers
• US existing home sales rise in May; mortgage rates still a constraint

Pressure growing among Fed minions for rate cut:

• Fed’s Goolsbee says tariffs have not had expected impact so far
• Fed’s Bowman open to cutting rates at July policy meeting

• Fed’s Bowman eyes broad set of bank capital reforms

Fed to no longer police ‘reputational risk’ in banks

Fed’s Mary Daly says communication should have ‘clarity’ and ‘flexibility’

Bigger trouble developing in Eurozone:

• French private sector activity contracts further in June, PMI shows

ECB minions say they’ll only engage in bond buying in “exceptional” cases, really want a digital Euro:

• ECB’s Nagel says bond-buying is only for exceptional cases
• ECB’s Lagarde urges EU lawmakers to speed up digital euro law

Shares advance, oil prices settle sharply lower as markets shrug off Iran conflict

• Wall Street advanced and oil slid after Qatar intercepted an Iranian attack on a U.S. base

Tuesday, 24 June 2025

• Signs and portents for the U.S. economy:

• Oil prices drop 6% as Israel-Iran ceasefire reduces Middle East supply risk

• Trump says China can buy Iranian oil, urges it to buy US crude

Trump says US interest rates should be at least two to three points lower

Fed minions resisting cutting rates, bitterly cling to belief tariffs will cause inflation:

• Powell repeats rate cuts can wait as Fed studies tariff impacts

• Fed’s Williams sees slower growth, higher inflation this year on tariffs, uncertainty
• Fed’s Schmid says there is time to study tariff effects before rate cuts
• Fed’s Collins says modestly restrictive monetary policy is necessary right now
• Fed’s Barr: inflation to rise, may see some persistence
• Fed’s Hammack sees no imminent need to cut interest rates

Fed officials are starting to break rank and join Trump

• Trump Slams “Dumb” Fed Chair As Powell Shrugs Off Dovish Colleagues, Reiterates “No Rush” To Cut

Exclusive: Fed should wait on rate cuts with price hikes expected, Bostic says

• Tariffs were supposed to drive inflation. Why hasn’t that happened?
• Tariffs and taxes are not very inflationary

Bigger trouble, stimulus developing in China:

• Exclusive: Local Chinese governments promote ‘zero-mileage’ used car exports, inflating sales
• China can maintain high growth and transition to consumer-led economy, premier Li says

• China issues guidelines on financial support for boosting consumption

BOJ minion still thinking about hiking Japan’s interest rates some more as one inflation measure runs hot:

• Hawkish BOJ policymaker signals chance of ‘decisive’ rate hikes
• Japan’s corporate service inflation hits 3.3% in May

ECB minions say they would do something if faced with a “material” change in Eurozone inflation expectations:

• ECB would react to ‘material’ changes in inflation outlook, Lane says

Wall Street surged on Israel-Iran ceasefire, S&P 500 ends less than 1% away from record close

• Nasdaq 100 notches first record high close since February

Wednesday, 25 June 2025

• Signs and portents for the U.S. economy:

• New home sales fall to seven-month low in May; supply increases
• US new vehicle sales set to rise 2.5% in June, report says
• Oil steadies as investors assess Iran-Israel ceasefire, demand outlook

Outgoing chief Fed minion clings bitterly to belief tariffs will cause inflation, other minions to change rule to make it easier for government to borrow:

• Powell says Fed needs to manage against risk that tariff inflation proves persistent

• Powell calls reports of lavish Fed building renovations inaccurate
• Fed’s Powell cautions against ending Fed power to pay interest on reserves

Trump says he is considering three or four candidates for next Fed chair

Fed advances plan to ease bank leverage requirements

• Fed Moves To Relax Key Capital Rule For Big Banks To Support Treasury Markets

Fed hawks and doves: what US central bankers are saying

Bigger stimulus, US trade deal developing in China:

• China’s consumption push will support global growth, Premier Li says
• China takes action on key US fentanyl demands
• Exclusive: US allows ethane to be loaded and shipped to China, but not unloaded, letter says

Wall Street ended mixed as Iran-Israel ceasefire seems to hold

• Wall Street ends mixed amid cooling Middle East tensions; Powell in focus
• Nvidia hits record high as analyst predicts AI ‘Golden Wave’

Thursday, 26 June 2025

• Signs and portents for the U.S. economy:

• Oil rises as draw in US crude stocks signals firm demand
• US labor market softening as more people remain on unemployment rolls
• US demand for China-made goods ebbs on tariff worries; ocean shipping rates drop
• US durable goods orders soar in May on aircraft
• US goods trade deficit widens in May as exports fall
• US first-quarter GDP revised lower on tepid consumer spending

Fed minions thinking maybe they should cut US interest rates, but not in July 2025:

• Fed rate cut in July? Inside the US central bank, few takers

• Fed’s Kashkari expects two rate cuts this year, with pause possible

• Fed’s Kashkari says more clarity needed on tariffs’ impact on inflation

Fed’s Collins: not enough data by July to decide on a rate cut

Fed’s Barkin says tariffs will start pushing up inflation

Market bets on a more dovish Fed as Trump eyes Powell’s replacement

Bigger trouble developing in China:

• US demand for China-made goods ebbs on tariff worries; ocean shipping rates drop
• GE Appliances to spend $490 million reshoring production of washing machines from China

ECB minions using AI to improve their economic forecasts:

• ECB economists improve GDP forecasting with ChatGPT

Wall Street ended higher as the S&P 500 came up just shy of its all-time trading high

Friday, 27 June 2025

• Signs and portents for the U.S. economy:

• US and China finalize trade deal; White House eyes agreements with 10 key partners, commerce secretary says

• US says deal with Beijing will expedite rare earth exports from China

Trump cuts off US trade talks with Canada, shattering optimism over tariff deals

Oil set for steepest weekly decline in two years as risk subsides

Fed minions plan to spend their summer waiting for data:

• Summertime data to pave way for Fed rate cuts, or further conflict with Trump

Bigger trouble, stimulus developing in China:

• China’s factory activity expected to shrink for third month amid trade tensions: Reuters poll

• China’s May industrial profits slip back into sharp decline

China’s central bank pledges to speed up policy response to economic conditions

BOJ minions react to inflation data telling them to hike rates again by looking for other data that excuses them from hiking rates:

• Core inflation in Japan’s capital slows but stays above BOJ target
• In dovish tilt, BOJ zooms in on obscure underlying inflation trends

ECB minions told they’re chasing the wrong inflation target they claim to be on path to hitting:

• ECB should change inflation target, researchers to tell policymakers
• ECB on path to meet its 2% inflation target, ECB’s De Guindos Says

Wall Street ended in the green as the S&P 500 and Nasdaq notched a new record close

• S&P 500 record fueled by earnings strength, easing tariff fear
• Nasdaq Composite hits record high; See Nasdaq-100′s 10 best and worst YTD performers
• Safe-haven gold falls 2% on easing US-China trade tensions

The CME Group’s FedWatch Tool projects the Fed will continue holding the Federal Funds Rate in a target range of 4.25-4.50% until its 17 September (2025-Q3) meeting, when it is expected to cut the rate by a quarter percent. The FedWatch Tool now anticipates the Fed will keep cutting the FFR a quarter point at a time twice more after that first cut in 2025, on 29 October (2025-Q4) and 10 December (2025-Q4), before slowing to cut rates at 12-week intervals into mid-2026.

The Atlanta Fed’s GDPNow tool projection of real GDP growth in the U.S. during the current quarter of 2025-Q2 fell to +2.9% from the +3.4% level recorded a week earlier.

Image credit: Microsoft Copilot Designer. Prompt: “An editorial cartoon of a Wall Street bull celebrating a new record high for the S&P 500, while a Wall Street bear looks worried at a news headline that reads ‘GOOD: TRADE DEAL WITH CHINA! BAD: CANADA TRADE TALKS OFF’”.