Markets Rally as Tax Clarity and Economic Data Offer Optimism
Market Recap for the Week of June 29, 2025
As of Friday’s market close, the U.S. stock market reached a new all-time high, as measured by the S&P 500. The index now has a year-to-date (YTD) return of approximately 5%. While this is a strong recovery, the U.S. market is still lagging behind international stocks, which are up nearly 20% YTD—a difference of more than 10%.
Some of the economic data released last week was heavily distorted by recent tariffs. After falling about 6% in April, durable goods orders surged by 16% in May. This volatility is understandable, as businesses adjust their orders in response to a constantly shifting tariff landscape.
Treasury Secretary Scott Bessent spoke on Friday about the “big beautiful bill,” stating that it could reach the President’s desk by July 4th. If passed, it would provide greater clarity on the future of the U.S. tax regime.
“The S&P 500 reached a new all-time high, even as global markets continue to outpace U.S. stocks.”
Chart of The Week
A major driver of the U.S. stock market’s recovery has been the de-escalation of the trade war. Our chart of the week—sourced from the JPMorgan Guide to the Markets—shows average tariff rates on goods imported into the U.S. over the past 120 years. As seen in the chart, tariffs have remained very low for the last four decades. The orange line represents the maximum tariff levels that would have been reached if no progress had been made since April 8th. The blue line shows the current expected trajectory. While tariff expectations have improved, the projected levels (blue line) would still mark a significant increase relative to historical norms. This would likely lead to economic pain. Bottom line: the tariff situation has improved, but we are not out of the woods yet.
The commentary in this blog is for informational purposes only and should not be taken as personalized investment advice
Chart Source: Goldman Sachs Investment Research, United States International Trade Commission, J.P. Morgan Asset Management. For illustrative purposes only. The estimated weighted average U.S. tariff rate includes the latest tariff announcements. Estimates about which goods are USMCA compliant come from Goldman Sachs Investment Research. Imports for consumption: goods brought into a country for direct use or sale in the domestic market. The estimate does not consider non-tariff barriers, such as value-added taxes. *Figures are based on 2024 import levels and assume no change in demand due to tariff increases. Forecasts are based on current data and assumptions about future economic conditions. Actual results may differ materially due to changes in economic, market, and other conditions.
Guide to the Markets – U.S. Data are as of June 26, 2025.
