Covering June Market
June was a strong month for stocks with several major indexes including the S&P 500 and the Nasdaq 100 hitting new all-time highs.
This brought to an end a turbulent first half of the year in which stocks got off to a good start, crashed spectacularly due to tariff uncertainty, and then rebounded sharply. The best-performing sector for the month was Technology, which was boosted by investor interest in artificial intelligence (AI). Consumer Staples, a more defensive sector, was the biggest underperformer, negatively impacted by risk-on sentiment.
Conflict in the Middle East dominated headlines in June. This began on June 13 when Israel launched a series of strikes deep into Iranian territory (predominantly targeting nuclear sites) and Iran immediately retaliated, raising concerns about the potential for a wider regional war as well as the potential for global economic repercussions due to disruption to the Strait of Hormuz. Naturally, this brought defence stocks – one of the best-performing areas of the market in 2025 – back into focus as investors anticipated higher levels of spending in this industry.
It also boosted the cybersecurity sector, which plays a vital role in defence today. Note that at the 2025 NATO summit in the Netherlands in late June, members agreed to increase defence spending to 5% of GDP by 2035. This is likely to further support defence and cybersecurity revenues in the years ahead (see figure 1).
Fuelled by ongoing innovation and significant spending within the tech sector, AI continued to be a hot investment theme.
This benefitted a range of companies, ranging from those building the necessary data centre infrastructure to those developing hardware and software applications. Notably, chip stocks had an excellent month with the likes of Nvidia, AMD, Lam Research, and KLA Corp all producing double-digit gains (Nvidia hit new all-time highs and came close to a $4 trillion valuation). Oracle also had a strong month – rising more than 32% – after it raised its annual revenue forecast on the back of AI cloud demand and announced a $30 billion annual cloud deal late in the month.
Another big tech theme in June was self-driving cars.
On June 22, Tesla launched its long-awaited robotaxi in Austin, Texas. This created some excitement around the stock as the potential here is significant. However, it looks like Tesla is going to be facing a substantial amount of competition when it comes to autonomous vehicles. During the month, Volkswagen announced that it will launch its self-driving ID. Buzz AD vehicles in 2026 while Amazon said that it is hoping to manufacture 10,000 Zoox robotaxis annually in the near future. Uber also signed a partnership with Alphabet’s Waymo to launch an autonomous driving service in Atlanta (which propelled Uber’s share price to new all-time highs).
For the Magnificent 7, which have struggled at times in 2025, it was a good month overall.
Microsoft hit new all-time highs as investors focused on the tech giant’s potential in agentic AI. Meta Platforms also climbed to record levels on the back of developments in the AI space (it invested $14 billion in Scale AI and has been offering huge salaries for AI specialists).
On the downside, Tesla underperformed (despite its robotaxi launch) after CEO Elon Musk had a major spat with US President Donald Trump early in the month.
It’s worth pointing out that there were signs of life in the Initial Public Offering (IPO) market in June.
The biggest IPO was that of Circle Internet Group, which specialises in stablecoin issuance (a stablecoin is a digital asset that maintains a 1:1 peg with the US dollar). It came to the market at a $6.9 billion valuation, but soared in value in the weeks following the IPO. IPO activity – which is predicted to pick up in the second half of 2025 – can benefit both banks and private equity companies.
On the economic front
The US Federal Reserve held interest rates steady in June. Chair Jerome Powell – who continues to receive criticism from Donald Trump – also poured cold water on hopes for a July rate cut due to uncertainty surrounding tariffs (the Fed does expect to make two small rate cuts later in 2025). Across the Atlantic, the Bank of England (BoE) kept rates steady as well. It cited global events like the conflict in the Middle East – which could potentially lead to more inflation – as its main reason for no reduction. The European Central Bank (ECB), however, did cut rates. It reduced its key interest rates by 25 basis points, bringing the deposit facility rate down to 2.0%.
During the month, the US and China signed a significant trade agreement aimed at de-escalating ongoing tensions and stabilising global markets. Note that in China, there were signs that economic conditions are improving (retail sales were up 6.4% in May – the largest increase since December 2023).
Zooming in on currencies, the US dollar had a very poor month, with EURUSD and GBPUSD ending the term at 1.18 and 1.37 respectively. For the greenback, it was the worst half-year performance since the mid-1980s.
Turning to commodities
It was a volatile month for oil, which soared when the conflict in the Middle East began, before plummeting when a ceasefire was announced. It ended the month at around $65 per barrel, after starting the period just above $60 and reaching $75 during the peak of the month.
Gold was also up and down, rising when geopolitical uncertainty was high in mid-June before pulling back as risk-off sentiment subsided in the second half of the month.
For crypto, it was a mixed month, with Bitcoin rising and Ethereum falling.
In a watershed moment for the crypto industry, however, the US Senate passed the GENIUS Act, moving to create a regulatory framework for stablecoins. The enactment of this legislation would represent a big vote of confidence for digital assets as a legitimate financial tool. And it could lead to the rapid expansion of an area of financial services that is already growing at a fast pace.
