Weekly market report: June 25, 2025

Weekly market report: June 25, 2025

USA

During the last week, the U.S. economy presented a mixed picture. Inflation remained sticky, with May's CPI holding at 2.4%, reinforcing the Federal Reserve's cautious stance on rate cuts. Economic growth showed signs of moderation, with the Atlanta Fed revising its Q2 GDP forecast slightly downward to 3.5%. Meanwhile, retail sales fell 0.9% in May and the Conference Board’s Leading Economic Index declined 0.1%, signaling potential headwinds. Labor market data reflected this cooling trend, as initial jobless claims continued to inch upward. Nonetheless, consumer sentiment improved sharply, with the University of Michigan's index rising to 60.5, the highest since February. The equity markets reflected this uncertainty: the S&P 500 and Nasdaq slipped around 0.4% and 0.5% respectively, weighed down by soft economic data and cautious corporate guidance, while the Dow Jones posted a flat to slightly negative performance.

Europe

In Europe, data pointed toward a fragile and uneven recovery. UK output price inflation hit a four-year low, and PMI data signaled slower expansion across the region. The UK’s flash composite PMI eased to 50.7, suggesting near-stagnant growth, and Q2 GDP is expected to slow significantly after a stronger Q1. The ECB and Bank of England are both expected to proceed cautiously with monetary easing, particularly after recent rate cuts failed to spark stronger growth momentum. Geopolitical risks, especially rising oil prices due to Middle East tensions, have renewed inflationary concerns despite the soft economic backdrop. European equities responded negatively: the STOXX Europe 600 declined, and major indices such as the DAX, CAC 40, and IBEX 35 fell between 1% and 2% for the week. The FTSE 100 held up slightly better, supported by energy sector gains.

Japan



 Japan's economy offered modestly positive signals. Flash PMI data for June showed manufacturing activity returning to expansion territory at 50.4, breaking an 11-month contraction streak. Services PMI also improved to 51.5, pushing the composite reading to a four-month high of 51.4. Employment grew at its fastest pace in nearly a year, and output prices rose at the quickest rate in four months, even as input costs eased. Despite these improvements, investor sentiment remained fragile, partly due to global risk aversion and the potential impact of energy price spikes. The Bank of Japan maintained its cautious approach, seeking financial stability amid bond market volatility. Japanese equities mirrored this uncertainty: the Nikkei 225 declined about 1% for the week, while the broader TOPIX also trended lower.

China

In China, economic indicators remained underwhelming, as the country continued to grapple with its real estate crisis. New home prices continued to decline, reflecting ongoing weakness in the property sector, although earlier in the week, a brief spike in retail sales offered a glimmer of resilience. Inflation remained moderate around 2%, and the overall 2025 GDP growth forecast was held at 4.5%. However, investor confidence was dampened by the lack of progress in trade talks with the U.S., which resumed in London without substantive breakthroughs. On the equity front, both the Shanghai Composite and Hang Seng indices fell over the week, pressured by domestic economic uncertainty and a broader global shift toward risk aversion due to geopolitical tensions in the Middle East. Policymakers are expected to maintain accommodative policies in the near term to support domestic demand and financial stability.

Disclaimer

Information contained in this material is obtained from sources believed to be reliable, however, there is neither representation, warranty nor guarantee, in any manner that accuracy, completeness, timeliness, reliability or suitability expressed or implied for any purpose that users of the material may be intended. Users or any third parties acknowledge that Investbanq Pte. Ltd. (“Paladigm”), its information providers or any related licensors or employees shall not be held liable for or to any contractual, tortuous liability, damage or consequence including but not limited to lost opportunity in connection with the use of the information in any way claimed to be arising.

Paladigm may discontinue or make changes in the information, products or services in this material at any time without prior notice to users.

No solicitation or offer of any investment instruments or services in any jurisdiction shall be constructed.

Information including but not limited to financial data, commentary or any other materials contained in the material is the properties of Paladigm, unless written consent from Paladigm is obtained, no information may, in any manner, be copied, transmitted, disseminated, sold, distributed, published, broadcasted, circulated for any purpose, cause or reason.

Materials related to certain investment tools of which authorization has not been obtained is not intended to, and shall not, be distributed or circulated publicly. Readers acknowledge that access to those materials is taken on readers' own initiative.

There can be no assurance that the investment objectives of any program, products or services will be met. Past performance is not necessarily indicative of future results. Futures and options trading involves substantial risk of loss. An investor could potentially lose more than the initial investment. Investor must read current agreements and any applicable supplements before they invest.

Contact us

Leave your contact details and our manager will be in touch as soon as possible to provide advice on any questions you may have.