Recap
Last week, the S&P 500 jumped 3.4%, the Nasdaq surged 4.2% and the Dow Jones rose 3.8%.
US stock prices hit all-time highs as optimism over a U.S.-China trade framework and a largely successful ceasefire between Iran and Israel boosted market optimism. Cautious statements from Fed Chair Powell in his congressional testimony got a mixed market reaction. Softer US GDP data increased optimism that the Fed could cut interest rates as soon as July, if not September. Crude oil, natural gas, gold, and silver prices all turned lower. Platinum and palladium prices increased amid hopes that trade agreements could increase global growth.
This Week
President Trump’s Big Beautiful tax bill is expected to be voted upon this week in the Senate. If passed, it would allow sweeping corporate tax cuts, which traditionally benefit stock prices. Thursday’s NFP figures will be the main economic event of the week, with the data expected to influence the Fed‘s decision on opting for a rate cut in July or later in the year. Markets will also closely watch the July 6th OPEC+ meeting, amid another possible output increase in August.
Stocks
FACEBOOK
Facebook’s price jumped 7.58%, rising to a four-month high by the end of the week. The tech stock garnered interest last week amid a Bloomberg report that it was deepening efforts in AI development by attempting to acquire PlayAI, a company specializing in AI voice replication tech. This follows reports that Meta has been poaching some of the best AI talent from rival tech companies. In recent weeks, Investment banks have upgraded the stock price, with Citi raising its price target to $803 and UBS increasing to $812 last week, and Meta has surged over 25% so far this year.
JP MORGAN
JP Morgan’s stock price advanced 4.25% to a five-month high. On June 27th, the Federal Reserve announced that JP Morgan (and all other major investment banks) passed its annual stress test, meaning JP Morgan is well capitalized and could resist a potential economic or market crisis. The news boosted the US banking sector. The investment bank recently added new features to its Self-Directed Investing platform via its mobile app and website. JP Morgan is the largest bank by market capitalization and has surged by 42% over the past year. There is optimism among market makers ahead of JP Morgan Q2 earnings results on July 15th.
Commodities
Crude Oil
Crude oil prices dropped 14% to a two-week low after a surprise ceasefire brokered by the US last Sunday between Iran and Israel took hold, drastically reducing tensions in the Middle East. The ceasefire eased fears of potential major disruptions of oil supplies. After an initial sharp fall on Monday, oil prices remained range-bound for much of the week after US inventories figures fell sharply, suggesting demand remains strong for oil domestically. A move towards finalizing a trade deal between the US and China could also suggest stronger future oil demand from both countries.
Gold
Gold prices fell 2.9% after the Israel–Iran ceasefire, lifting market caution as markets moved away from safe-haven instruments. During testimony in Congress, Fed Chair Powell stated that the Fed remains “in no hurry” to cut interest rates while questions remained about high inflation, also reducing gold’s appeal.
Copper
Copper prices surged to near three-month highs, rising by 5.2% by the close of business last week. The metal rose initially after talk of potential tariffs on copper imports, causing an increase in imports in order to avoid duties. But news that the US and China (and India), two of the major importers of copper, are close to a trade deal acted as a catalyst for rising prices. The current strong demand in China due to the construction and EV sectors reaffirmed market bullishness. Meanwhile, global supply remains tight according to inventory data.
EUR/USD
The EUR/USD pair increased 1.8%, its highest level since September 2021, after President Trump criticized Fed Chair Powell again for not cutting rates sooner, signaling that when Powell's term ends next year, Trump could appoint someone more aggressive with rate cuts. The Iran-Israel ceasefire also cooled support for the safe-haven greenback, while somewhat weaker US economic data increased the chances of rate cuts in the US.