**#MarketRebound – Key Trends & Drivers (June 2025)**
### **1. Post-Tariff Rally Gains Momentum**
- The S&P 500 has surged **18%** since its April 8 low, erasing 2025 losses and nearing pre-crash levels, fueled by eased trade tensions and a 90-day U.S.-China tariff truce .
- The **Magnificent Seven** (e.g., Nvidia, Apple, Meta) drove ~40% of the rebound, with their ETF (MAGS.Z) up **30%** since April .
- **Technical indicators** suggest renewed bullish momentum, with the S&P 500 breaking above its 200-day moving average .
### **2. Sector Rotation & Broadening Participation**
- **Industrials, utilities, and financials** outperformed early in 2025, signaling a shift from tech dominance .
- Equal-weight S&P 500 (.SPXEW) has caught up to the market-cap-weighted index, reflecting broader market health .
- **Mid-caps and value stocks** are gaining traction as investors diversify .
### **3. Risks & Challenges**
- **Tariff overhang**: Effective U.S. import tariffs remain at **14%** (vs. 2.5% in 2024), pressuring corporate margins .
- **Valuation concerns**: S&P 500 forward P/E ratio hit **21.4** (vs. long-term avg. of 15.8), raising sustainability questions .
- **Recession fears**: 45% of institutional investors still predict a 2025 recession, though down from 67% in early May .
### **4. Global & Macro Factors**
- **Bond vigilantes**: 10-year Treasury yields near **4.5%** could stall gains if they breach 5% .
- **"Sell America" trade**: 35% of investors now favor global indices (e.g., MSCI All World) over U.S. stocks .
- **Commodities**: Oil rebounded to **$62.70/barrel** (WTI) after April’s crash to $58.95 .
**Outlook**
- **Bull case**: Goldman Sachs and Yardeni Research project S&P 500 reaching **6,500** by year-end (+10% from current levels) .
*Bear case UBS warns of "weaker economic data" as tariff impacts materialize, downgrading U.S. equities to **neutral** .
Key Takeaway While the rebound is technically strong, its longevity hinges on tariff resolutions, earnings resilience, and Fed policy.