Global Market Pulse – June 26, 2025
Global Markets Hit Fresh Records
World stock markets posted gains, with global indices marking their second record-high in three days, lifted by expectations of U.S. rate cuts Europe followed suit, and Asian markets, led by Japan, contributed to the broad rally .
Key metrics: The S&P 500 is within 1% of its record close, with Nasdaq and Dow also trading near all-time highs.
Dollar Weakens Amid Rate Expectations
The U.S. Dollar Index fell to a three-year low, reflecting investor confidence in potential Federal Reserve rate cuts and increased appetite for equities This shift fueled gains in international stocks and bonds.
Central Banks Navigate Policy Shocks
Global central banks, including from Norway and Switzerland, diverged—with surprise rate cuts—while the Fed remained on hold. Markets are recalibrating amid policy uncertainty triggered by trade tensions and geopolitical risks
Capital Flows: US to Europe
Despite talk of de-risking U.S. exposure, most allocations remain steady ft.com. Still, top strategists like Jeff Currie foresee a structural shift: flows favoring Europe’s infrastructure and defense sectors, supported by EU budget boosts and military investment
Mid-Cap & Dividend Play Gains
Amid volatility and trade uncertainty, funds like Franklin Global Growth have pivoted toward mid-cap and dividend-paying large-cap stocks, which offer better value after tech’s strong run
Caution on the Horizon
BCA’s Peter Berezin still forecasts a potential 25% S&P drop and recession odds (~60%), citing rising debt defaults and stalled credit conditions UBS also warns of summer volatility and advises investors to favor defensive sectors, even as tech and AI leadership persists
Today’s Market Snapshot
Global Dow: +1.0%
Dow Jones: +0.85%
Nasdaq 100: +0.7%
S&P 500: +0.7%
VIX (Fear Index): –2.3% (16.38)
Dollar Index: –0.6%
Why It Matters
Monetary divergence: Central banks are responding unevenly, increasing market complexity.
Currency stress: A weaker dollar supports global equity gains but pressures bond markets abroad.
Rebalancing wave: Capital is incrementally flowing to Europe, signaling a potential strategic shift.
Risk management: Elevated valuations, trade risks, and geopolitical unease call for diversified, defensive positioning.
Markets are in rally mode, fueled by hopes of U.S. rate cuts and global policy shifts, yet underlying risks persist from geopolitics, corporate debt, and valuation concerns. Savvy investors may find opportunity in mid-caps and non-U.S. equities while preparing for volatility. Expect the narrative to evolve as summer’s macroeconomic and policy dynamics play out.
