Market Monitor News June 30 BMO (UP - DOWN)

If you'd told me a few months ago that the S&P 500 would punch through a new all-time high while geopolitical tensions were still smoldering and inflation was sticky, I’d have asked if you were also betting on the Mets winning the World Series.

But here we are. The S&P 500 (6,170 | +0.5%) closed at its highest level in four months, fueled by easing trade fears, a dovish Fed outlook, and a fresh wave of AI-driven euphoria.

Trade Turmoil Turns to Trade Triumph

Markets started the day with a minor hiccup after President Trump abruptly pulled the plug on trade talks with Canada, accusing them of slapping American tech firms with a "shameless digital services tax" and gouging U.S. dairy farmers with 400% import tariffs.

His words? “A direct and shameless attack.” His action? “ALL trade discussions with Canada terminated.”

And yet, traders shrugged.

Why? Because behind the scenes, diplomacy seems to be working overtime. According to Bloomberg, no fewer than ten trade deals are reportedly near completion, including one with the EU. Meanwhile, a framework agreement with China is already signed and sealed, and even the rare-earth supply bottleneck (a topic that makes tech investors sweat) appears resolved.

The message from the market? Short-term geopolitical theatrics aren't going to shake this rally, at least not yet.

Inflation? Yes. Panic? Not Anymore.

The latest PCE data showed U.S. core inflation rising slightly to 2.7% YoY in May, up from 2.6% in April. Notably, that’s above the 2.6% economists expected, but no one's running for the hills.

What’s more telling is this: personal incomes fell 0.4%, and consumer spending dipped 0.1%.

Tariff fears and job market uncertainty are doing their thing. I’d say: mark your calendars, Powell might blink soon.

Consumer Confidence Rebounds, but Doubts Linger

The University of Michigan’s final read for June consumer sentiment jumped to 60.7, up from 52.2 in May. That’s a strong uptick, but before we break out the champagne, remember that confidence is still 18% below post-election December levels.

Consumers are still wary. While near-term inflation expectations dropped (12-month view down to 5.0%, 5-year outlook to 4.0%), they remain well above the 2024 average. It’s like telling someone the fire is “almost out”, you’re still going to get a raised eyebrow.

Big Movers: Nike Just Did It. Nvidia Can’t Stop. Tesla… Shrug.

Now, let’s talk stocks.

The Dow Jones (+1%) outperformed both the S&P and the Nasdaq (+0.5%) thanks in large part to Nike (NKE | +15.19%), which had its best trading day since 1987. That’s right, Reagan was still in office the last time the swoosh flew this high in one session.

The trigger? A smaller-than-feared revenue dip and CEO Elliott Hill’s upbeat “path to recovery” comments. HSBC even upgraded the stock to a rare “buy,” bumping its price target from $60 to $80. Cue the short-covering stampede.

Nvidia (NVDA | +1.76%) reclaimed its title as the most valuable public company in the U.S. with a staggering $3.84 trillion valuation. The continued AI frenzy, fueled by fresh optimism and no new competition capable of dethroning it, keeps pushing it higher.

Core Scientific (CORZ | +1.77%) extended its massive rally following acquisition interest from CoreWeave. On Thursday, it had already spiked 33%. Someone’s clearly betting big on digital infrastructure.

n the flip side, Palantir Technologies (PLTR | –9.37%), a darling of AI bulls this year (+91% YTD), took a nosedive ahead of the weekend. A reminder that not all AI trades are created equal.

Tesla (TSLA | –0.66%) was in the red again, this time after it was confirmed that Omead Afshar, a longtime Musk lieutenant, is leaving the company. While the headlines sound innocuous, every exec exit at Tesla makes investors uneasy these days.

Concentrix (CNXC | –6.2%) dropped hard after disappointing earnings. Apparently, missing targets in this kind of market gets punished quickly.

Oil Drips, Dollar Dips

Crude oil (WTI) closed slightly higher on Friday but still shed more than 11% on the week, one of its steepest declines this year. That’s a big deal, as lower energy prices help the Fed’s inflation outlook.

Meanwhile, the euro/dollar ended near 1.1704, continuing its modest recovery.

Looking Ahead: Don’t Get Too Comfortable

Yes, stocks are climbing, and AI is back in the driver’s seat. But don’t let the green screens fool you. Inflation’s still sticky, geopolitical risk hasn’t vanished (Canada is still fuming), and the consumer isn’t ready to throw a party.

We’re walking a fine line here and the next few weeks, with upcoming jobs data and Fed chatter, will likely determine whether this rally has real legs or is just another sugar high.

I’ll be back tomorrow, until then, keep your stop-losses tight and your coffee black & strong.

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Kristoff - Co-Founder ChartMill

Next to read: Market Monitor Trends & Breadth Analysis, June 30