Weekly Market Update (June 08, 2025)

Market Hedwig
Jun 8
2 min read

HIGHLIGHTS

S&P500 returned to 6000 this week, and is at 2% below its all-time high. It is mainly driven by the solid economic data. Trump-Xi call reduces the tail risk of trade war, at least in the near term.

Job: Nonfarm payroll and unemployment data remain solid, indicating that the economy is still resilient. However, although the hard economic data has held up so far, markets expect the data to soften over the coming months.

USD: The US dollar has dropped 6% year-to-date. The job report is consistent with a more slowing real economy and less exceptional US performance, which will still weigh on USD over time. Foreign investors continue to look for diversification ahead as there are more signs of less-welcoming environment for foreign investors in US assets.

Risks: Although the data looks solid recently, there are many potential risks in the market that market participants should be aware of, including fallout from trade disruption, increasing tensions over BBB and tariff moratorium deadlines.

MARKETS

Nasdaq	19,529.95	+2.18%
S&P 500	6,000.36	+1.50%
Dow	42,762.87	+1.17%
10-Year	4.51%	+9bps
Brent	66.65	+6.32%
DXY	99.20	-0.24%

*Data as of market close. 5-day change ending on Friday.

VIEW FROM THE STREET

Equity

J.P. Morgan: In US, AI names remain strong as chip makers increased chip demand from hyperscalers. However, although demand exceeds supply, guidance has fallen short of expectations because of the chip export restrictions.

Standard Chartered: The tax bill is net-earnings positive, including the extension of tax cuts, tax deductions on R&D, interest expenses and capex. We suggest adding exposure to US equities on pullbacks.

Fixed Income

Goldman Sachs: While investors are seeing the high yields as a fair compensation for holding US debts in recent years, there are fiscal sustainability concerns and a drop in demand from foreign investors. It could increase the cost of fiscal expansion with higher yields and weaker dollar.

UBS: We recommend that investors switch some USD fixed income exposure to European investment grade. The fears about US deficit could lead to diversification trend away from US fixed income assets, increasing the upward pressure on yields and downward pressure on USD.

Economy

UBS: We expect tariff rate to end the year at 15%, up from 2.5% at beginning of the year. US is likely to shift its focus to countries where the negotiations have stalled, such as the EU.

Morgan Stanley: US has built debts during the prosperity days, leaving less room for policy navigation in the next recession. Combined with tariffs, tax cuts, and geopolitical events will keep a floor under longer duration global cost of capital. It will limit the opportunities for the Treasury to benefit from Fed rate cut.

KNOWLEDGE TRANSFER

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DISCLOSURE

This newsletter is meant for informational purposes only and is not investment advice. Always consult a licensed investment professional before making important investment decisions. Advertising and sponsorship do not influence editorial content or decisions. Market Hedwig is not responsible for the promises made or the quality or reliability of the products or services offered in any advertisement.