Market Recap: June 2025

CFA®, CFP®, Chief Investment Officer


Market Recap: June 2025

Month in Review 

  • Easing geopolitical and trade pressures helped to lift equities higher in June, as corporate fundamentals continued to show signs of improvement.  
  • The US Dollar (DXY Index) fell -10.8% for the year ending June 30th, marking the sharpest first half decline for the currency since 1973. This provided a boost to US investors holding international assets, as detailed below.  
  • The S&P 500 completed its recovery from its roughly -19% decline, making new all-time highs and standing at +6.20% YTD (S&P 500 TR Index). In June, US small cap stocks (Russell 2000 TR Index) and US large cap growth (Russell 1000 Growth TR Index) stocks rose +5.44% and +6.38% respectively.  
  • Long-term interest rates declined from highs during the month, which helped to push major bond markets higher. The Bloomberg Barclays Aggregate Bond TR Index rose +1.54% during the month of June.  

Income Opportunity in International Equities  

International equity markets are enjoying a strong start to 2025, with the broad-based MSCI All Country World Ex-USA Index (“MSCI ACWI Ex-USA”) returning +17.90% in 2025 through June 30th. The depreciation of the US dollar has provided a significant boost to US investors holding US dollar denominated international exposure, adding over 9% to YTD 2025 results versus local currency international equities (MSCI ACWI Ex-USA Local Currency).  

In addition to the benefits of currency diversification, there are attractive income opportunities for growth and income investors. The MSCI ACWI Ex-USA has a trailing dividend yield of 2.86%, compared the S&P 500’s trailing dividend yield of 1.28%. The S&P 500’s dividend yield is below its long-term average, reflecting underlying trends within the index. Within the S&P 500, only 14.7% of the Index has a yield greater than 3%, compared to 27.7% for the Russell 1000 Value and 45.8% for the MSCI ACWI Ex-USA Index. This largely reflects the increased concentration in more growth-focused sectors such as Technology and Communication Services within the S&P 500.  

The currency diversification and higher dividend yield offered by international equities complements more growth-focused US equity exposure, a key tenant of maintaining diversified portfolios for long-term investors.  

What’s on Deck for July?  

  • As of time of writing, there is an early July deadline for re-negotiating outstanding trade deals. Progress on trade will be followed closely by investors.  
  • The Federal Reserve Open Market Committee (FOMC) meets on July 29th and July 30th to decide any changes to policy and short-term interest rates. As of 6/30, there is a 21% chance of a 0.25% rate cut at the July meeting. The so-called “dot plots” released on June 18th indicate the FOMC is expecting to cut rates by 0.25% twice in 2025.   
William Winkeler
About the Author

Bill has more than 15 years of experience in the investment industry, most recently as Managing Director of Investments at a private wealth management firm. In his role at Confluence, Bill chairs the Investment Advisory Committee and develops and implements investment strategy for clients of the firm, as well as communicates investment content with clients.