Optimism on the move
Last week turned out to be remarkably strong. The main driver behind this success was undoubtedly the swift and peaceful resolution of the Iran-Israel conflict. The news impressed investors to such an extent that they rushed into equities, buying everything in sight without hesitation or concern for other factors.
This is clearly reflected in the sector breakdown: 9 out of 11 economic sectors ended the week firmly in the green. Leading the charge were exactly those sectors typically responsible for driving the market in a growth phase – namely, major technology names in the Communication Services sector (average weekly gain of +5.73%), the broader Technology sector (+4.81%) and Consumer Cyclical (+4.07%).
Conversely, the week’s clear underperformers were oil and gas stocks in the Energy sector, which lost an average of almost 3% (-2.98%). Even that drop seems relatively mild considering that crude oil prices fell nearly 13% (-12.8%) over the same period.
In short, it was a hype-driven week, and neither Federal Reserve Chair Jerome Powell – who spoke for two days straight – nor U.S. President Donald Trump managed to spoil the party. Although the latter came close on Friday when, in the middle of the main trading session, he suddenly announced the suspension of trade talks with Canada. The market reaction was immediate and sharply negative. Fortunately, with a couple of hours remaining before the close, investors had just enough time to cool off, regain composure and end an otherwise strong week on a high and optimistic note.
As a result, and quite unexpectedly, all major U.S. indexes climbed to new heights and comfortably set fresh records. The only exception was the old-timer Dow Jones (DJIA-30), which made a solid effort and even gained more than its younger peer, the S&P 500 index: +3.82% versus +3.44%. However, it still fell short of the coveted 45,000 mark, having previously suffered a deeper correction.
Meanwhile, both the S&P 500 and NASDAQ Composite confidently pushed through to new highs. The S&P 500, the main benchmark of the U.S. market, surpassed its previous all-time high from 19 February, closing at 6,173 points. The NASDAQ Composite also hit a new record, beating its 16 December peak and ending the week at 20,273 points. A heroic performance indeed.
An even bigger standout was the ITS Shariah Index (ITSS), which broke its all-time high not once but four times (!!!), coming just short of the symbolic 1,300-point level. Its peer, the ITS World Index (ITSW), also joined the rally, closing at a new record high of 1,338 points.
In short, it was a week of records – much to investors’ delight. The market closed the week, the month and the quarter at unprecedented levels and is looking ahead with growing confidence. Investor sentiment has clearly improved and become noticeably less anxious. This applies not only to the U.S. market but also globally. For example, Hong Kong’s Hang Seng Index also posted local highs last week, returning to levels last seen in January 2022.
For now, we can celebrate this surge in optimism and the strong momentum set by the past week. But we should not let our guard down. As we all know – after a white stripe often comes a black one. So stay alert.
Market outlook for 30 June 2025
Optimism is spreading across the globe – or at least across financial markets, and even then not universally. But in the U.S., it certainly is. Judging by the end of last week and the start of this one, a casual observer might conclude that everything is going brilliantly and the world is free of problems. Of course, that is far from reality.
Still, after Friday’s record-setting close, the U.S. market appears poised to continue its upward climb. At the start of the week, futures on the main American indexes are up by around half a percent – a welcome sight for investors. Monday’s gains were driven by a surprise decision from Canadian authorities to cancel a planned digital services tax on tech companies, just hours before it was due to come into force. The move is seen as an attempt by Ottawa to revive stalled trade talks with the Trump administration.
In general, this week could well extend the positive momentum of the last – one marked by records and strong sentiment. And there are plenty of reasons to believe that.
Firstly, today marks the end of both the month and the quarter – which means professional market participants will be eager to close it on a high note, securing the best possible results. After all, their half-year bonuses often depend on it. And retail investors, as usual, are happy to follow their lead.
Secondly, it’s a short week – with the U.S. celebrating one of its key national holidays, Independence Day, on Friday. And as everyone knows, Americans like to head into holidays in a good mood. So they’ll do their best not to let the market dip before then.
On the risk side, at least in terms of scheduled events, the week looks fairly calm. The Q1 earnings season has wrapped up, and Q2 results won’t start arriving until 15 July. We are now in a planned pause, with no major sources of irritation expected on the horizon.
As a result, market attention will shift to macroeconomic data. The key figures will be published on Wednesday and Thursday, including June’s job creation numbers and the unemployment rate. So far, the labour market hasn’t given investors much reason to worry – and there’s hope that this trend will continue. If so, there should be no major triggers for a sell-off.
That said, the pace of index growth in recent days has been rather steep, and early signs of a “bubble” are beginning to emerge – which, as we know, is typically followed by a correction. This is something investors should be prepared for, though it is more likely to happen next week, after the holiday.
All in all, the outlook for this week remains quite positive. Growth is likely to continue, though at a slower pace. This means there is still a solid chance of fresh all-time highs across all major indexes – including the Dow Jones, which remains the only one not yet part of the record-breaking club.