Where Are Markets Today?
Futures this morning indicate that both the U.S. and European stock exchanges will be opening in the red. London’s FTSE is due to open down some 33 points at 8,838, Germany’s DAX is down by 189 points at 23,783, France’s CAC 40 by 44 points at 7,732, and Italy’s FTSE MIB lagging by 282 points at 39,858. Concurrent U.S. futures see the S&P 500 and Nasdaq 100 both down by approximately 0.2% and the Dow by approximately 72 points. Markets reset expectations for international trade and attribute volatility to conflicting signals in regards to U.S.–China tariff talks. President Trump’s tweet—”WE ARE REceiving A TOTAL OF 55% TARIFFS, CHINA IS REceiving 10%”—and subsequent official pushback shook confidence in the path that talks are taking.
Trump’s contradictory signals—initially reporting a U.S.–China trade agreement with substantial tariffs, and later contradicting Treasury and Commerce reports—have created market doubts as to whether a proposed deal is likely to be long-lasting. This risk-off sentiment is being fueled by the uncertainty in China-sensitive German and French markets that had depended upon exports to Korean and Chinese demand.
U.S. equity futures react to the S&P 500’s first negative day in four, supported by weak breadth in technology, despite continued strength in large-cap earnings—Oracle had added to gains today after a solid performance last session. Together with the tension in the form of trade, and also in the technology momentum, a cautious open in both the American and European markets is expected.
With the global outlook weaker, the course of the day will be determined by whether optimism in trade can be restored and whether U.S. macro reads—GDP, PPI, core PPI, and jobless claims, specifically—are able to reverse sentiment. A dovish surprise in the releases would insulate markets and support risk appetite anew, but another escalation in trade rhetoric could lock in the downside risk for equities worldwide. At Zaye Capital Markets, we think this uncertain environment is suitable for selective, quality exposure—especially in defensives and globally diversified names—until macro and trade clarity returns.
Major Index Performance as of June 12, 2025
• S&P 500: Currently at 601.36 and down by -0.28% for the day
• Nasdaq Composite: At 532.41, down by -0.33%.
• Dow Jones Industrial Average: 429.60, essentially flat at -0.02
• Russell 2000: Trading at 213.63, down -0.41%.
The S&P500 and the Magnificent Seven
The mega-cap technology “Magnificent Seven” stocks, that is, Meta, Apple, Nvidia, Microsoft, Tesla, Amazon, and Alphabet, are starting to show signs of fatigue. They have fueled year-to-date advances but are coming under pressure as profit taking and mounting doubts over extended valuations begin to take effect. This is weighing on S&P 500 breadth, reflecting a weak market structure in which leadership is narrowly based. Investors appear to be rotating into value plays, energy, and defensives as AI momentum stops and yields creep up.
Drivers Behind The Market Move
With Europe and the U.S. opening down in the markets, recent events form a chain guiding sentiment and positioning. These are the top three catalysts for today’s move:
1. Trump Comments Cause Selloff in Trade, U.S.–China Negotiations
President Trump’s mixed tariff signals—offering a possible 55% U.S. tariff on Chinese exports, making a unilaterally imposed tariff threat, but then offering a deadline reprieve for July 8—are introducing fresh volatility into trade policy. This unpredictability is confusing global supply chains and sowing seeds of distrust in tradable sectors like autos and industrials. Reuters news wires say that the markets had anticipated that a U.S.–China ceasefire would bring certainty, but with China dragging its feet over approval and Trump threatening to extend unilaterally imposed tariffs, risk sentiment is guarded.
2. Slowing U.S. Inflation and Expected Delay in Rate Cut
The Consumer Price Index reading for Thursday showed a rise of just 0.1% a month, confirming expectations that inflation is slowing. Despite this, expectations for Federal Reserve rate cuts are being set back as wage and underlying pressures remain elevated. This is negative for the U.S. dollar, falling to a six-week low, and is sensibly tightening bond yields but fueling concerns over persistent inflation. Consensus is already expecting possible cuts in the fall, but there is widespread uncertainty.
3. Middle East geopolitics and Energy market ripples Continued
Middle East tensions—spotlighted by the partial US embassy evacuation from Iraq—have maintained oil prices near $70 a barrel. This risk premium on energy is translating into inflation expectations and further pressuring sensitive equity markets. Investors are monitoring the situation closely as any further escalation would have the potential to rapidly reverse sentiment and increase pressure on global equities
I’m. These forces – geopolitical risk, sticky inflation pressures, and trade policy risk – are coalescing for a volatile market climate. In Zaye Capital Markets, we suggest keeping a tactical overweight in quality areas within the market and being poised for the wave of economic data (GDP, PPI, jobless claims) that can provide additional directional insight.
DIGESTING ECONOMIC DATA
The Trump Tweets and Their Implications
Donald Trump’s recent wave of statements, interviews, and tweets is rewriting the macroeconomic and market narrative as we move into mid-2025. They cover a wide spectrum, from monetary policy, through trade, digital currency, manufacturing, to even cryptocurrency, and together they’re fueling speculation as to what could be in store for the markets in a potential second Trump term. Running through them is a common thread: a need to restore U.S. economic sovereignty and shake up current monetary and geopolitical arrangements that he perceives as diluting American competitiveness.
On trade, Trump’s revived initiative on sweeping tariff reimpositions on foreign auto imports and his embracing a federal appeals court ruling allowing the U.S. to use tariffs as self-defense represent a likely revival of aggressive protectionism. His promise that he would “work closely with Xi” to open up China to trade presumes bilateral talks, but the fine line is clearly driven by self-interest and leverage. Markets interpret this as a likely revival of arbitrary cross-border taxation, with the risk of reviving supply chain nervousness, inflation pressures, and commodity volatility. Equities that face exposure to manufacturing and international trade—most visibly autos, industrials, and retailers—would be pressured if the proposals take political hold. With monetary policy, Trump has been quite critical in his attacks against the Federal Reserve, advocating for a rate decrease by a full point, blaming what he calls “Biden’s Fed” for “crushing American savings and small businesses.” That rhetoric prompted traders to reprice rate expectations modestly, even as the Fed is, for the time being, intransigent. The market now sees every Trump-coincident policy move as possibly inflationary in the short term, having advocated for reduced rates and higher tariffs—a setup that would generate currency volatility and push demand for hedges like gold and Bitcoin.
Most notably, Trump’s anti-digital dollar rhetoric and public admiration for Bitcoin has galvanized debate surrounding decentralized finance. Referring to Bitcoin as “the currency that the government can’t print” and rebuffing “surveillance currency” accusations has further fueled retail sentiment for cryptocurrency. His words come at a time when recent institutional flows in cryptocurrency markets, further fueling speculation that a Trump-led administration will usher in favorable regulations for Bitcoin. To markets, this is a political twist to crypto rally and positions the battle between centralized and decentralized financial futures as an existential electoral issue. To Zaye Capital Markets, Trump’s tweets aren’t mere political grandstanding, but forward-thinking market catalysts with real implications for monetary policy, digital currencies, and sectoral volatility.
Small Business Optimism Distanced From Earnings Reality
The disconnect between small business sentiment and hard data on profits continues to obscure the reality of the U.S. economic recovery. Though May 2025 confidence surveys edged higher, Bloomberg-received data indicate ongoing declines in profits since 2020, with the smallest firms worst affected. This decoupling is not a mark of resilience but a red flag—a marker of structural dislocation between expectations and operational realities. Persistent inflation, volatile input costs, and logistical disruptions are still priced in across supply chains, distorting profitability even as sentiment readings edge higher.
Data from the National Federation of Independent Business also serves to underscore the problem. April’s optimism reading dropped to 95.8, below its 51-year average, even as 34% of owners reported having open positions they could not fill. This is pointing to something more basic: a tight labor market that is both crimping growth and fuelling wage pressure. Confidence levels may be temporarily boosted by cyclical euphoria or behavioral biases—while underlying earnings growth is being curbed by increasing overheads and productivity distortion. We as a business see this not as a recovery indicator but as a false impression of improvement, backed by unfounded hopes.
On a valuation basis, we favor some of the under-valued U.S. mid-cap manufacturers and logistic providers that have managed to maintain pricing power and maintain healthy inventory turnover. These types of companies—usually out of favour during times of macro uncertainty—can provide outstanding upside should labour and margin pressure normalize. For forward-looking analysts, unit labour costs, input price indices, and backlog-to-sales ratios are the real-time indicators that need to be in the limelight. At Zaye Capital Markets, we believe this is a moment not to chase sentiment-driven rallies but to invest capital with discipline in fundamentally robust, mispriced assets.
Affordability Gap in Housing Signals Structural Shift
The differential affordability of U.S. states isn’t a regional phenomenon anymore—but a home economy reorientation. A new affordability map by DataArbor places Montana and Idaho as the least affordable states at 0.41 and 0.42 (median home value ÷ median income) respectively, and Iowa and West Virginia as relatively affordable at 0.81 and 0.85. These ratios tell us more than about residential demand—they tell us about the basic effects of in-migration, demographic transformation, and non-uniform wage gains. What’s occurring is a disconnect between in-state earnings and imported property values in style-leading in-migration states.
This demand for housing is underscored by National Association of Realtors data of Montana’s 10% population rise (2010-2020) exceeding a 7% rise in the supply. Across Idaho as well, the trend is following suit under the influence of an influx of out-of-state workers and high-net-worth retirees from costlier coastal states. This leaves us with an affordability crisis brought about by neither by national economic forces but rather by locational imbalances in supply and demand. These locational imbalances are taking on long-term dynamics in the housing marketplace with rising mortgage payments and flat incomes now documenting a new level of structurally unaffordable states.
From an equity perspective, this points the analysts toward underappreciated residential REIT and construction plays with exposure to healthier markets such as West Virginia and Iowa. These markets may be prime for spillover demand as affordability refugees look for cheaper alternatives. We at Zaye Capital Markets suggest following regional home inventory levels and wage enhancement patterns and home burden ratios. These will be key to recognizing companies that will benefit from the affordability shuffle—and distinguishing structurally-oriented and cyclically-oriented opportunities.
Labour Market Tightness Remains Below Surface-Level Anticipations
Today’s latest labor market statistics paint a more nuanced picture than optimism press releases suggest. This chart documents a steady downtrend in the NFIB Small Business Hiring Plans Index and in the “Job Openings Hard to Fill” reading since 2020. While each of these readings remain in positive historical ranges, the downtrend means chronic labor shortages persist in continuing to be a drag on hiring intentions. These readings imply post-pandemic labor rebalancing is anything but complete—particularly among small businesses where chronic imbalance between labor supply and job openings persists.
To back this up, U.S. Bureau of Labor Statistics data indicate that companies with 249 or fewer workers contributed 55% of net job growth from 2013-2023. Their basic role in job creation also makes them particularly prone to labor frictions—increasing as tariff-related uncertainty builds in the background. NFIB’s report in May 2025 refers to trade policy concern as an input to cost uncertainty and complicating hiring decisions. These combined pressures—labour scarcity, rising wage inflation and geopolitical uncertainty—downplay small businesses’ responsiveness in increasing workforce numbers even while aggregate demand picks up in some industries. In the face of this background, we believe the greatest opportunities lie in automation-enabling mid-cap companies and workforce solution providers who gain a direct benefit from hiring inefficiencies. These names get priced in ambiguous labour signalling regimes. Our call at Zaye Capital Markets is for analysts to be aware of hiring plan diffusion indexes, job-by-job wage appreciation and B2B employment software strata uptake. These will highlight companies best situated to capitalize on smaller companies who are seeking external solutions to deal with perennial talent deficiencies.
Retirement Planning Gap Reflects Deeper Economic Fault Lines
A February Gallup poll by author and professional Naeem Aslam offers a telling snapshot of American attitudes toward retirement—94% of retirees with formal plans report being financially comfortable, compared to just 70% without them. Though this may on the surface indicate widespread comfort across the board, a glance beneath the surface reveals a discomfiting truth: comfort here is relative. The Federal Reserve’s 2022 Survey of Consumer Finances reveals average retirement nest egg account balances below $100,000—a sum hardly enough to ensure even modest post-work subsistence for decades. The following illustrates the ways in which financial planning affects not only actual readiness but also emotional sense of security.
This comfort gap also corresponds with generational patterns of wealth. Baby boomers benefited from post-WWII economic cycles and rising property values and now hold disproportionate national wealth—at a level exceeding even the level of the SDP, according to a 2024 economic study. This pooling of assets will strain public retirement systems as this generation exits the workforce. The 2023 Social Security Trustees Report estimates a potential 20% reduction in benefits by 2035 without corrective action and cites the risk to retirees with no private assets.
The promises of family or ad-hoc support will be insufficient for those with nothing formal in place as public safety nets are strained. From an investor perspective, we find early value in retirement-focused financial services companies and insurers targeting middle-income savers—a vast but untapped segment with growing planning imperative. We’d like to track closely retirement account penetration, product uptake in annuities, and income-replacement ratio performance. We at Zaye Capital Markets believe these will be the best metrics used to separate sentiment and substance in gauging the mettle of the retirement economy. With demographic forces meeting fiscal constraints head-on, the need for solutions-focused, scalable solutions in retirement is a reality—no longer an option.
Global Growth Prospects Cloud Over With Trade And Policy Headwinds
A new chart from World Bank data indicates a steep downward revision in global real GDP growth in 2025 to 2.3% from 2.7% in January. The revision reflects growing global uncertainty amid growing trade protectionism and unclear fiscal direction among large economies. The early-year optimism has been undermined by protectionist policy reverses and disruption in cross-border investment confidence with emerging economies severely hit. The revision reflects a rebalancing of global demand projections as global frictions in structures rise to take precedence over cyclic recovery momentum.
Latin America and the Caribbean—previously forecast to grow slowly—are now forecast to stagnate at 2.3%, in-line with the global rate. The declining trend has a direct link with U.S.–Mexico trade relations, again under strain with altered tariff regimes and renegotiated value chains. The 2023 World Bank report had noted exposure to inflation risk and external debt risk by emerging markets. All these factors seem to be converging now and pulling down growth curves and curbing investor appetite in frontier and semi-peripheral markets. The spillover effect affects multinational corporations utilizing these markets for scale of production and consumption opportunities. Equity lies in commodity-linked and globally diversified industrials with pricing ability and minimal exposure to low-growth geographies. Zaye Capital Markets’ analysts recommend focusing on trade-sensitive industries, following global tariff direction, and re-estimating earnings relative to new baselines for GDP. With inflation lingering from recent supply chain and geopolitical shocks, 2025 necessitates defensive positioning—on the basis not of recovery tales but of region-specific adaptive growth initiatives.
Policy Gaps In Bird Flu Represent Biosecurity And Policy Risk
Present comparative data show a stark disparity in the mortality from bird flu between the Europeans and the Americans. Europe, with a targeted vaccination among its farms, witnesses 117,409 losses while the Americas with minimal vaccination policy register 2.74 million bird deaths. This contrast strongly indicates vaccine efficacy in ensuring this mass outbreak from occurring and was validated by the 2023 WOAH report of over 500 million bird deaths reported globally since 2005. To commentators, this contrast amounts to a stark case study of how decisions in public policy impact industry resilience as well as supply chain resilience.
European Food Safety Authority reports indicate that even though vaccination is not a standard practice in the EU overall but where it has been administered has been integral to managing outbreaks with relatively little economic impact. The U.S., however, continues to accept mass killing—a policy that is being reevaluated after a 2025 Sentient Media exposé of an estimated $1.46 billion taxpayer-funded bailout. The policy can have the unintended consequence of decreasing the incentive to enhance on-farm biosecurity levels and make the chicken industry vulnerable to ongoing shock and mounting demands for attention regarding fiscal responsibility and animal well-being from the public.
Organizationally, the U.S. chicken industry’s high-density facility dependence contrasts with Europe’s decentralized systems based on pastures. While these systems leave them with greater exposure to airborne pathogens in the first place, these systems have also attracted regulation costs—like the 2024 U.S. chicken import ban by the EU based on sanitation reasons. We highlight this contrast at Zaye Capital Markets as a reminder to rebalance exposure to vertically integrated meat producers and freight carriers with large exposure to U.S. chicken exportation. Vaccination subscription levels overseas, frequency of bailouts, and food safety standards-related trade policy updates are variables worth monitoring for analysts.
Cooling CPI Conceals Structural Risks Underneath Data Integrity Problems
May 2025 CPI numbers show a relatively tame 0.1% month-on-month rise in headline and core inflation—from 0.22% and 0.24% in April. On the face of it, this indicates a softening trend and brings short-term comfort from April’s tariff policy-induced fears of a inflation explosion. But the timing and size of the slowdown raise questions about its being a true disinflation or a statistical illusion. We would advise scepticism in going by these numbers as evidence of sustainable taming of inflation in the face of the overall policy orientation and real-economy frictions.
Ongoing staffing shortages at the Bureau of Labor Statistics have resulted in suspensions of regional price collection in several cities like Buffalo and Lincoln starting in April—aligning with the very same timeframe this inflation slowdown has passed. The integrity of CPI readings in these circumstances is hence compromised with below-average sampling rates increasing the risk of regional bias or failure to completely capture costs. These resource restraints have short-term implications for the representativeness of CPI baskets—specifically in high-volatility items like food and shelter—and erode the inflation slowdown narrative. A 2023 Federal Reserve study estimates 0.3% per year in underreporting associated with price-collection gaps. Should this be the case, the current 2.4% per year CPI can actually be running at closer to 2.7%—more in tune with ongoing supply chain volatility and tariff pass-through shocks. Defensively positioned at Zaye Capital Markets, our preferred issuers are those with high cost-passing ability and high-margin resilience. Analysts must monitor current input costs, logisitics metrics and substitute inflation proxies in a quest to find hidden-price pressures traditional CPI readings increasingly miss.
Shelter Inflation Eases As New Home Construction Increases
Owners’ Equivalent Rent (OER)–one of the U.S. Consumer Price Index’s most important components–slowed down to +4.2% year-over-year in May 2025 from its near-peak of +8% in 2022. This moderation in inflation in shelter is a testament to softening cost pressures in the nation’s residential markets supported by long-term trend data from 1990 to 2024. We at Zaye Capital Markets interpret this change to be not simply a cyclic slowdown but the early sign of a broad structural rebalancing in rents supported by increasing supply and waning pandemic distortions.
One of the major catalysts in this softening trend has been the sudden rise in multifamily delivery levels to levels last seen in the 1970s. This new wave of supply is finally catching up with demand in major cities’ corridors and defusing pressures in rents by allowing affordability levels to reset. Numbers from a series of regional institutions show slowdowns in home construction are now acting aggressively on the CPI shelter component—a deflationary impulse which while lagged is very potent when it finally shows up. With increasing numbers of projects in the works to be delivered in the next quarters or so, downward pressures on rents can escalate before spilling over into softer OER prints. But OER itself is a lagging metric. It’s derived from consumer surveys estimating what the owners believe they’d be able to rent for—a metric which captures lease deals from the recent past rather than current price action. With a 12- to 18-month average lag, we’re expecting CPI shelter inflation to slow a bit more as recent softness in new-tenant rents increasingly works its way into the index. Watch for lease renewal patterns, vacancy levels, and completions as leading indicators of shelter-related disinflation traction. We remain upbeat on homebuilders with rent development exposure and high-density urban-focused REITs.
Mixed CPI Signals Reflect Crosscurrents in Inflation Dynamics
May 2025 inflation readings paint a mixed disinflation picture as a 2.35% year-over-year advance in headline CPI and 2.79% year-over-year advance in core CPI remain over the Federal Reserve’s long-term target but ease from 2022 peak inflation. The declines in the cost of gas (-12.0% y/y) and clothing (-0.9% y/y) provided major disinflation relief but were partly countered by ongoing increases in items such as food away from home (+4.5% y/y) and electricity (+4.1% y/y). The mixed composition reflects a fragile global supply chain recovery as well as differential pressures on non-essential as opposed to essential spending.
For the month, inflation remained in moderation with a 0.1% rise in headline CPI and 0.13% in core CPI. Such softer prints align with even greater pervasiveness in deflationary contributions from falling energy prices—a trend facilitated by prior Federal Reserve work in translating falling oil and gas prices into even wider moderation in inflation activity. Of note particularly, such results also moderate the perception of recent tariff announcements in terms of re-spiking inflation pressures, most notably in automotive and manufacturing goods industries whose pass-throughs have yet to occur. But geopolitical tensions may yet upset this tenuous equilibrium. The June 11 United States State Department authorization for the evacuation of non-essential personnel from Bahrain and Kuwait provides a cause for concern regarding energy marketplace stability. Historically, volatility in oil-exporting countries has unleashed supply shocks with echoes in consumer prices, particularly transport and utility classes. At Zaye Capital Markets, our suggestion is to keep an eye out for volatility in crude oil futures, shipping lane disruption, and energy import volatility. In the short run, inflation is tempering—but single-line numbers may underestimate the weakness below. Defensive exposure to consumer stocks and inflation-related utilities remains sensible in a world where uncertainty abounds.
Upcoming Economic Events
Monthly GDP, Core PPI m/m, PPI m/m, Unemployment Claims
With a timely macro positioning opportunity, focus is on a busy slate of market-moving U.S. releases. Investors need to see through tariff-induced volatility, tight supply lines, and conflicting signals on inflation. The latest readings on GDP growth, manufacturing prices, and job claims offer fresh insights into how well the U.S. economy is weathering domestic and foreign headwinds. In Zaye Capital Markets’ opinion, the outcomes from this week’s releases could meaningfully shape monetary policy expectations, sector rotation, and cross-asset allocation.
Monthly GDP
The monthly GDP report will be watched closely as a nearly real-time snapshot of U.S. economic expansion.
• If the print is better-than-anticipated, this would validate the thesis that underlying economic activity is withstanding the headwinds from outside the U.S. This would be expected to make the markets reassess the timing and size of future Fed rate reductions. Risk-sensitive assets would be initially boosted by the growth message, with cyclical-sensitive sectors such as industrials, financials, and consumer discretionary benefiting from it. It would also, however, be expected to push bond yields higher and hurt those with long-duration holdings as the potential for prolonged tight monetary policy reenters the fray.
• A weaker-than-anticipated GDP print—especially if accompanied by downward revisions for prior months—would fuel fear of stagnation, or worse, contraction. This would be expected to drive flows into Treasuries, utilities, and defensive stocks and put further pressure on the Fed to be even more dovish in the coming months.
Core PPI m/m & PPI m/m
Producer-level inflation is the best forward indicator of wider consumer price trends. Removing food and energy from Core PPI gives a cleaner read through underlying supply chain inflation pressures.
• A surprise upside in headline PPI or Core PPI would reawaken concerns that input cost inflation is re-accelerating—particularly unwanted against a backdrop of ongoing geopolitical risk and incipient tariff regimes. It would be bearish for rate-sensitive equities but bullish for the U.S. dollar and potentially support the case for a ‘higher-for-longer’ Fed. Markets would be likely to react with a risk-off bias, rotating into staples and energy at the expense of higher-growth technology.
• Lower-than-anticipated PPI prints, on the contrary, would embolden the opinion that prices pressures in the supply chain are easing. This would be bullish for Fed doves, would be likely to spark a relief rally in equities, flatten yields, and support bullish positioning in rate-sensitive sectors like real estate, technology, and consumer finance.
Unemployment Claims
Jobless claims remain to be the most sensitive and timely labour market gauge.
• A smaller-than-anticipated reading would validate that hiring is still robust, and the economy is continuing to absorb labour successfully despite macro noise. This would be a bullish sign for consumer resilience and corporate profit, yet perhaps a cause for alarm that tight conditions in the labour market are leading to wage inflation—perhaps prompting the Fed to delay a rate move. This would precipitate a split-market reaction: banks and retailers would be well, but long-duration equities would be vulnerable.
• A higher-than-anticipated rise in claims, a second consecutive weekly rise for example, would be a risk-off triggering event. It would be taken by investors as the first solid indication that the labour market is weakening, a development that would step up expectations for policy loosening and push money into bonds, precious metals, and recession-defensives such as healthcare and utilities.
At Zaye Capital Markets, we’re keeping track of these points not as independent stand-alone releases, but as part of a macro puzzle. Together, they’re going to move market mood, decide whether, and by how much, prices really are slowing, and map out Fed policy for the coming few months. Dovishly or hawkishly, this week’s calendar is going to redefine asset class portfolio strategy. Investors and traders must be ready for forceful market repricing in even modest misses against expectations.
Stock Market Performance
Markets rebounded forcefully from April lows, but wider drawdowns hint at ongoing vulnerability.
The leading U.S. indices sprang back from the April 8, 2025 low, but year-to-date drawdowns and underlying breadth gauges hide enduring weakness that lies below the surface. Below the momentum-building headline action, the average constituent in each index is lagging by a steep amount, indicative of uneven participation and selective leadership.
The split by index as of June 10, 2025, is as below:
S&P 500: Bounces Back, But Keeps Narrowly Distributed
S&P 500: +3% YTD | +21% off April 8 low | -19% from YTD high | Avg. member: -23%
The S&P 500 has recorded a +21% rebound from April lows, which has taken the index to a +3% year-to-date return. That notwithstanding, the -19% drop from peak to trough and -23% average member loss indicates just how concentrated the rebound has been, led by mega-caps.
NASDAQ:Tech-Led Rally Conceals More Pain
NASDAQ: +2% YTD | +29% from Apr 8 low | -24% off YTD high | Avg. member: -44%
The NASDAQ is leading the strength of the recovery, increasing +29% from its April bottom. Despite a +2% YTD return, the index’s -24% fall from peaks and abysmal -44% average member drawdown hint at continued distress in the hierarchies of both the tech and speculative growth stocks. Appreciation at the index level is still not reflective of sector-wide well-being.
Russell 2000: Small-Caps Rebound But Are Still Vulnerable
Russell 2000: -3% YTD | +22% off Apr. 8 low | -24% off YTD high | Avg. member: -37% The small cap stocks have come back nicely from recent bottoms, +22% higher since last April. The Russell 2000, however, is -3% year to date with the same -24% drawdown from peaks as the NASDAQ and a stunning -37% average member loss, reflecting ongoing investor nervousness about exposure to high beta, low liquidity names.
Dow Jones: Relatively Stable, but Nonetheless Susceptible
Dow Jones: +1% YTD | +14% from Apr 8 low | -16% from YTD high | Avg. member: -23% The Dow Jones has fared reasonably well year-to-date, +1% higher with a +14% rebound from the April low. Defensive stocks and industrials provided a cushion, but the -16% pull from highs and average member loss of -23% illustrate even the strongest names weren’t spared from macro pressures.
At Zaye Capital Markets, we believe that the present market configuration is one where headline gains hide underlying weakness. It is narrow groups that move the indices, and breadth data is weak. Investors need to remain stock-pickers and search for quality names with sound balance sheets and sectoral tailwinds, given that broad-based buying is not in sight yet.
Strongest Performing Sector in All These Indices
Industrials Set the Pace with 2025 Performance with Broad-Based Strength and Resilience
The best-performing S&P 500 sector year to date in 2025 both in absolute and against recent trend is Industrials. Industrials, up +9.1% year to date, are far outpacing the group, supported by rebounding capex, investment in infrastructure, and strong global demand for transportation and machines. The sector has continued to lead with strong reliability in the face of market volatility, a demonstration of the confidence investors have in economically sensitive, as well as asset-intensive, businesses.
Month to date, the Industrials sector is up a modest +0.8%, a reflection of steady returns rather than a transient spike. This is a hallmark of strength rather than speculative rotation, a characteristic that is attractive to investors in times of volatile macro backdrops. Sector strength is further suggested by relative weakness in typically defensive sectors like Utilities (-1.5% MTD) and Consumer Staples (-1.6% MTD), reflecting a tilt towards higher-operating-leverage sectors with sound growth prospects.
At Zaye Capital Markets, we still hold the view that Industrials are well-positioned for the next phase of the cycle. The relative outperformance here is consistent with healing supply chain flows and a gradual rebound in manufacturing activity worldwide. Order book backlogs, capacity utilization, and cross-border freight statistics are some data points that analysts must watch as key leading indicators for determining whether this sector can maintain its outperformance in the latter part of the year 2025.
Earnings
June 11, 2025 – Yesterday’s Earnings
• Oracle Corporation
Oracle beat top- and bottom-line expectations in Q4 FY2025. It reported revenue of $15.90 billion, up 11% YoY, with robust 27% cloud revenue growth and a 52% Infrastructure-as-a-Service increase, driving non-GAAP EPS to $1.70 compared to expectations for $1.64. It raised full-year outlook, expecting 16.7% revenue growth and guiding to 40%-plus cloud growth going forward into FY2026—a strong reflection of ongoing AI-powered enterprise demand.
• Chewy
Chewy reported net sales of $3.12 billion (+8.3% year over year) and gross margin of 29.6% (-10 basis points). GAAP EPS dropped to $0.15, but an adjusted EPS of $0.35 beat estimates. Recurring revenue was driven by 82.2% AutoShip penetration, but the stock declined on margin contraction and missed net income estimates by a slim margin.
SAILPOINT, INC., OXFORD INDUSTRIES, KIRKLAND’S, BIT MINING
There were no public material disclosures or market-moving news on these names as of yesterday’s close.
Today’s Earnings – June 12, 2025
• Adobe Inc. (after-market open)
Adobe releases Q2 FY2025 results today, with consensus looking for $4.97 EPS and approximately $5.8 billion in revenue. Investors must pay attention to margin trends in both Creative and Experience Cloud, as well as the progress in its newer GenAI products, and tone on pricing power, especially after volatile post-earnings moves in recent quarters.
• Freedom Holding Corporation & Rh
Freedom Holding Corp. (regional brokerage firm) and RH (high-end home furnishings) also report today. Freedom’s cost control, trends in commissions, and volumes in capital-markets trading will be in focus. For RH, revenue trends, inventory, and gross margins will likely drive sentiment.
Analyst Observes
• Oracle prioritizes increase in cloud backlog, enterprise demand fueled by AI, and future margin guidance.
• Chewy relies on consistent revenue health, utilization via AutoShip, and margin resilience in spite of cost pressures.
• Adobe requires close supervision of GenAI monetization as well as commercial cloud subscriptions.
• Freedom Holding and RH must be judged by fee income and market-share gains. It is dependent upon discretionary consumer spending, margin levels, and inventory control.
In Zaye Capital Markets, surprises aren’t so attractive as quality earnings. Seek out steady streams of revenues and quality communication on macro drag or tailwinds.
Stock Markets – Wednesday, June 12, 2025
The U.S. markets traded cautiously during the middle week, balancing softer inflation data against Middle East tensions. Investors hesitated as they absorb the meaning of a dovish CPI report, with a hawk’s eye open for further Middle East tensions following U.S. diplomatic efforts in Bahrain and Kuwait. Short-term Fed cut hopes were dashed despite soft inflation data by underlying wage strength and consumer resilience.
Stock Prices
Economic Developments and Geopolitical Events
The May Consumer Price Index recorded a modest +0.1% monthly increase, offering evidence that inflation is easing. But core CPI lingered at 2.8% year-over-year, reflecting persistent underlying forces in operation. This mixed backdrop is dampening expectations for bearish rate cuts, with the market itself currently discounting a less aggressive policy path. Meanwhile, State Department approval for voluntary evacuation of nonessential staff from U.S. missions in Bahrain and Kuwait has heightened concerns of energy market disruption—adding a geopolitical risk premium to oil-sensitive commodities.
The S&P500 and the Magnificent Seven
The mega-cap technology “Magnificent Seven” stocks, that is, Meta, Apple, Nvidia, Microsoft, Tesla, Amazon, and Alphabet, are starting to show signs of fatigue. They have fueled year-to-date advances but are coming under pressure as profit taking and mounting doubts over extended valuations begin to take effect. This is weighing on S&P 500 breadth, reflecting a weak market structure in which leadership is narrowly based. Investors appear to be rotating into value plays, energy, and defensives as AI momentum stops and yields creep up.
Major Index Performance as of June 12, 2025
• S&P 500: Currently at 601.36 and down by -0.28% for the day
• Nasdaq Composite: At 532.41, down by -0.33%.
• Dow Jones Industrial Average: 429.60, essentially flat at -0.02
• Russell 2000: Trading at 213.63, down -0.41%.
For Zaye Capital Markets, this week is a readjustment week. Inflation is slowing down, but Fed policy is in a state of limbo. Mega cap growth names are decelerating, but defensive and yield-sensitive stocks attract money. Participants must be nimble and watch closely for rate expectations, geopolitical currents, and sector rotation.
Gold Price On Wednesday, June 12, 2025
Gold is priced at $3,369.35 per ounce, up by some $14.07 or +0.42% from the previous session. It is higher on higher demand for safe-haven as markets digest a fresh wave of politically sensitive comments from Trump, including calls for a full percentage point reduction in the Fed rate and re-support for tariffs on foreign autos. The comments caused unease on future inflation policy and geopolitical stability—two conditions under which gold is attractive. Strength in the asset today is a sign that investors are defensively hedging against policy risk and fiscal divergence themes.
In our opinion at Zaye Capital Markets, recent action in gold is a very strong signal that investors are looking for protection against real yield compression, policy unpredictability, and longer-term macro risk. On the recent CPI reading, meanwhile, inflation softened by more than expected as headline as well as core each inched up a mere 0.1% from the previous month. This tempered fear of Fed tightening but well-short of dispelling structural inflation concerns. In combination with today’s pending GDP, PPI, and jobless claims releases, gold is gaining momentum on expectations softer economic reading will support the case for rate cuts.
Oil Prices – Wednesday, June 12, 2025
Oil is trading in the $69 and $70 per barrel area, supported by a new wave of geopolitical risk following the evacuation by the U.S. Embassy in Iraq. The news prompted a nearly-5% price jump a day earlier as the market immediately proceeded to price in the risk of disruption to Middle East supply lines. In addition, recent U.S. gov reports presented falling shale production alongside another decrease in active drilling rigs—providing structural support for crude prices. On the upside, though, expected increases in OPEC+ supply, even softer in character than initially anticipated, cap the upside by putting marginal supply onto the market.
Trump’s recent statements on bringing back the call for reforming tariffs and supporting U.S. energy self-sufficiency have had a spillover effect on oil market sentiment. His emphasis on U.S. manufacturing and energy self-sufficiency has led the market to anticipate changes in policy that could loosen environmental conditions and increase domestic exploration, increasing future supply. Yesterday’s softer-than-anticipated reading on CPI (0.1% monthly rise) also contributed to a softer energy bull, as it helps to remove fear of over-contraction by the Fed, which could otherwise choke off demand. This afternoon’s releases on GDP, PPI, and jobless claims will be crucial. Firm economic fundamentals can support ongoing energy demand, again supporting prices, while whatever signal that activity is decelerating can put downward pressure on crude as demand expectations need to be re-set.
Bitcoin Prices – Wednesday, June 12, 2025
Bitcoin is at $108,480, down by nearly 1.1% intraday, as it grapples with political and economic headwinds. Trump’s recent statements—lauding Bitcoin as “the only currency that can’t be printed by the government,” disparaging the digital dollar, and touting higher-yielding, Bitcoin-linked preferred stock arrangements—continue to gain credibility and narrative momentum for the cryptocurrency space. Trump’s affection supports acceptance sentiment and fuels demand for Bitcoin-backed financials such as MicroStrategy’s STRD, boosting institutional and retail demand. Elsewhere, word that Invesco experienced zero ETF inflows today sees institutional allocation momentum take a breather, with the market remaining range-bound but catalyst-sensitive.
Economic Data and Sentiment Outlook The cooler-than-expected CPI reading (0.1% monthly gain) dashed expectations for heavy Fed rate cuts, lifted real yields, and weighed on rate-sensitive assets—bitcoin not least. But the combination of sticky core inflation and geopolitical risk is a support for demand for inflation hedges, and participants remain engaged in crypto despite that. Today’s reports slated to come in—GDP, PPI, and jobless claims—will distort sentiment as well. A strong GDP or PPI reading would challenge the safe-haven story in bitcoin, putting downward pressure in risk-on mode, while a miss either print could revive flight-to-crypto flows, emphasizing bullish momentum. In Zaye Capital Markets, we believe bitcoin is a hedge in a policy-uncertain world, and prices depend upon today’s color and Trump’s changing political pull.
ETH Prices – Wednesday, June 12, 2025
Ethereum (ETH) is trading at $2,761.02, down by -0.86% in the day, from a previous intraday peak of $2,871.30. The pullback follows a fiery rally that had pushed ETH to a 15-week peak, fueled by aggressive buying by institutions and rising open interest inderivatives. U.S. spot Ether ETFs are gaining steam, with over $125 million net buying in one day, and aggregate flows totaling nearly $745 million in the last 11 sessions. The ETF buying is indicative of increasing institutionally supported confidence in Ethereum, especially in the wake of certainty on regulations for staking and custody arrangements. The fresh wave of allocation shows that ETH is being viewed as an institutionally appropriate asset class alongside Bitcoin.
Whale movements and price effect Ethereum whales moved in forcefully, with recent activity notching more than $7.8 billion worth of ETH moved in big-ticket deals in a 24-hour span, and a whale address loading up with over $800 million in ETH in anticipation of soon-to-be-approved ETFs. Concentration of this kind in the hands of large holders has a known predilection for presaging movements of high volatility. On-chain activity, meanwhile, has spiked, with Ethereum’s unique wallet count up greater than 70% this quarter, undergirding long-term network strength. Today’s macro data—GDP and PPI in this case—potentially represents a tipping point. A dovish bias can extend whale buying and ETF tailwind, bringing ETH within reach of the critical $3,000 resistance. A beat, or stronger-than-anticipated macro print, can slam on the brakes, typically. In my opinion, Ethereum is bullishly positioned in Zaye Capital Markets, but a near-term liquidity challenge is looming on the horizon as macro is weighed against crypto-catalyst triggers.
