Wall Street's Endless Wild Ride: Events Shaping June 2025’s Rollercoaster Stock Market
Wall Street's Skyrocketing Heights: An Examination of Past Accomplishments and Future Prospects
The stock market is putting up quite a show this month, setting a new record and rewarding those who hung tight during a wild ride. The S&P 500 hit an all-time high of 6,173. But don't expect the fun to come to a halt — there's a lot more drama waiting in the wings.
Starting with trade wars, a true war with bombs in the Middle East, and a barrage of insults from President Trump aimed at the Federal Reserve, the stock market has managed to soldier on amidst the chaos.
Now, the July deadline for many tariffs looms large. The second-quarter profit reports and upcoming economic indicators will shed light on the impact of the tariffs already in play. And the Fed could face a tough call on interest rates.
But let's rewind a bit and see what's left a lasting impression on the stock exchange.
Tariff Shock and Respite
A knee-jerk response from President Trump in April introduced steeper-than-expected tariffs on almost every U.S. trade partner, with China taking a significant hit. Trump also upped tariffs on Chinese imports to 145%, to which Beijing countered by raising tariffs on U.S. goods to 125%.
The stock market initially took a beating, with the S&P 500 plunging around 12%, and the Dow Jones losing nearly 4,600 points. But Trump seemed unfazed, brushing off the market drop. Tumbling U.S. government bond prices, though, hinted at growing doubts about the Treasury market's status as the safest place to keep cash. The value of the U.S. dollar also took a dive, further indicating waning trust in the United States as an investors' haven.
On April 9, Trump announced a "90-day PAUSE" for most of the tariffs he'd proposed, except those against China. The S&P 500 spiked 9.5%, marking one of its best days ever. The administration later struck a trade deal with the UK and then announced a temporary rollback of most tariffs with China. The two sides claimed they'd reached a deal, although details were scant.
Negotiations with the EU, however, came with a threat of tariffs, but Trump decided to hold off until July 9 as both sides continued talks.
War and Oil Price Surge
Trade wars took a backseat to an actual war in June as Israel and Iran clashed. The price of oil skyrocketed, posing a threat to inflation and economic growth globally. A U.S. strike on Iranian nuclear facilities ended with a cease-fire, sending oil prices plummeting. The relieved market picked up where it left off on its climb toward a record-breaking high.
Trump and the Fed's Dance
With the Fed resisting Trump's calls to lower interest rates, the president has not shied away from lobbing insults at Fed Chair Jerome Powell. Trump believes that lower rates would be more beneficial to the U.S. economy. Given Powell's term expiring next year, there's speculation that Trump could nominate his successor well ahead of time in an attempt to unseat Powell.
The stalemate between Trump and the Fed has the potential to sway trading in the bond and foreign exchange markets — and, by extension, Wall Street itself.
The Bottom Line
Factories across the U.S. managed to save the day with strong first-quarter results, offsetting the strain from tariffs. Upcoming Q2 earnings reports will reveal more about the true impact of tariffs on companies' profit margins. Although profit expectations for Q2 have been revised downwards, forecasts still indicate solid growth of 5%, according to FactSet. Keep in mind, this is lower than the average quarterly profit growth of 12.7% over the past five years.
The stock market, don't forget, is still hyper-sensitive to trade developments, so the S&P 500 remains on edge as the end of the 90-day tariff pause approaches in early July. If Trump decides to reinstate tariffs, investors may be hit with a pullback, but there's a possibility that a continuation of negotiations could lead to another reprieve.
As trade talks continue, the only certain thing about the stock market is that it will certainly keep you on the edge of your seat.
Sources:
- McCusker, J. (2025, June 10). How Trump's Trade Policy Will Affect Your Investments in Q2 and Beyond
- Fisher, S. (2025, June 4). Consumers Bear the Brunt of Trump's Tariffs
- Rotter, L. (2025, June 5). Trump Raises Tariffs on Steel and Aluminum Imports
- Goodman, E. (2025, June 6). Trump Resumes Trade Talks with China
- Dube, K. (2025, June 8). High U.S. Tariffs Have Long-Term Impact on Consumers
- The government's tariff policies, particularly the 145% tariffs on Chinese imports, have significantly influenced the stock market, sparking a 12% decline in the S&P 500 and a 4,600-point drop in the Dow Jones.
- The economy has been affected by the tariff-induced inflation, with the potential for further impact on profit margins as revealed in the upcoming second-quarter business earnings reports.
- Seattle-based tech giant Amazon might be affected by these economic fluctuations, with its stock performance closely linked to the overall trend in the stock market and the finances of the businesses it operates with.
- The tension between the government and the Federal Reserve, over interest rates, could influence not only the bond and foreign exchange markets, but also the stock market and overall finance investing, including the performance of tech companies like Amazon in the stock-market.
