Where Are Markets Today?
Markets expect a relatively subdued opening following U.S.–China negotiators establishing an early benchmark on a trade deal in London. U.S. futures falling by: S&P down-0.16%, Nasdaq down-0.17%, Dow down-0.14%. The tone reflects the anticipation from traders regarding direction on the trade deal and today’s influential inflation report.
For one thing, Europe’s divided reaction is due to anticipation of lessened trade pressure—such as relaxing rare earth limits—and doubt about how binding the system really will be. With implementation awaiting presidential signatures and legal interpretation still ongoing, wait-and-see attitudes among investors await; a lack of advance content has cooled enthusiasm.
U.S. futures returned the favor next. The trade truce helped to relieve some tariff tension but markets are searching the outline for concrete commitments rather than political spin. With May’s CPI numbers out next, futures traders anticipate inflation prints that will determine what the Federal Reserve will do next. A hotter-than-forecast print will likely top out the advance while a softer print will buoy sentiment and validate risk-on positions.
Down the road, today’s inflation announcement and trade policy news will dictate the macro agenda. U.S. futures and European futures can rally if U.S. CPI prints soft and the trade architecture achieves official traction. The opposite can lead to additional caution and potential downside prior to establishing additional market momentum.
ZC numbers this morning show European indexes declining back: FTSE down-14 points, DAX down-105 points, CAC 40 down-9, FTSE MIB down-95, and
Major Index Performance to June 11th, 2025
- Nasdaq Composite: +0.3%
- S&P 500: +0.1%
- Dow Jones Industrial Average was unchanged
- Russell 2000: Stable with minimal movement
Magnificent Seven and S&P 500 Pressure
The sudden 14% decline in Tesla last week—a product of the Twitter spat between Tesla CEO and Trump—demonstrates how mega-cap concentration skews aggregate sentiment in the marketplace. Tesla alone represented nearly half of the S&P 500 and Nasdaq 100 one-day declines, and this highlights how the volatility of one mega-cap can bring down indexes with them. The risk involved with being overweight in the so-called “Magnificent Seven” and the risk involved with double-counting ETF holdings is highlighted by this consideration.
Drivers Behind The Market
U.S. and European markets remain cautiously priced today as a result of headwinds brought about by political risk, inflation expectations, and trade structure uncertainty. Regional indexes and futures are mildly down in trading. There are three drivers of investor sentiment today
1. First U.S.–China Trade Agreement with Conditions
A preliminary trade deal from talks in London turned hopes of defusing the bilateral trade war into the positive. The deal was reported to address Chinese export restraints on strategic inputs like rare earths and magnets. The failure of precise terms and U.S. President Trump and China’s President Xi Jinping’s approvals yet to be obtained planted seeds of doubt. As such, U.S. and European markets opened moderately down and didn’t allow traders to go full risk-on.
2. Tariff-Driven Inflation Pressure
According to new evidence, May’s core CPI may have risen unexpectedly to 0.3%—its four-month high—along with 2.5% year-over-year headline inflation. This likely has to do with recent tariff activity and will lead to a delay by investors in expecting an easing of monetary policy from the Fed. Increased input costs may delay rate reductions and add to the downward pressure on equities and cyclically exposed consumer-spending industries.
3. Trump’s Rhetoric and Criticism of the Fed
The recent salvo from former President Trump against the Federal Reserve in the form of assertions like “the Fed has broken the economy” and retaliatory tariff threats has overlay political risk onto macro analysis. His utterances add risk uncertainty in future central bank independence and trade policy as well as increasing rate and currency volatility. Such forces pose headwinds to equities while fueling demand for safe-haven assets like gold—enabling a demonstration of political oratory and financial mobility in the marketplace.
Markets thus find themselves in between hope regarding diplomatic improvement and concern about inflation and risk from policy. Release of the CPI today and any change in the trade formation can change the equation simultaneously.
Digesting Economic Data
The TRUMP Tweets and Their Implications – 11 June 2025
Recent media blitzes by ex-President Trump have again put him in the middle of political and financial market discussion. His most potent declaration—”The American economy has been crippled by the Federal Reserve — I alone can restore it”—frames what’s being increasingly heard as an economic populist crusade against central bank independence, rate policy, and institutional power. The language, driven by his constant belittling of the Federal Reserve’s rate control, is creating controversy over policy and how the markets will respond if Trump wins re-election. His message’s growing support from voters can be seen in improving polls in six swing states and a $300 million fundraising spree, and he’s a political and market-moving force.
Trump’s language in finance says a great deal more than campaigning slogans. His complaint of “rates killing small business credit” constitutes a direct critique of the hawkishness of the Fed and a call for a dovish rate setting—something the markets desperately need. His campaign also promised ideas like a national Bitcoin treasury plan, accepting BTC payments for Trump Media and a general call for monetary decentralization with such comments as “no central bank should determine the future of our nation.” These words are creating a pro-crypto anti-establishment theme which is impacting not just Bitcoin but risk assets and alternative investments in general. It’s a potential policy reorientation worth taking note of for traders and institutions.
Apart from markets, Trump’s language also has geopolitical implications. His call for “No more globalism—it’s America First or nothing,” and threats to “turn over every rotten deal they signed,” suggests withdrawal or renegotiation of global trade and multilateral deals. Should he go ahead and follow this with action, this may re-ignite trade wars, destabilize global supply chains and punish equity markets—particularly those with global exposure. Investors now decipher his language for signs of what a second Trump presidency will bring in terms of regulation, fiscal stimulus and the United States’ place in the international order.
Last but not least, Trump’s social media salvoes, interviews, and going-viral quotes—from “Still Standing” memes to his remarks likening Bitcoin to “freedom”—are political small talk. It’s crossing over into psychological narrative and creating markets volatility and keeping institutional and retail traders focused on looking beyond economic news as much as considering the potential for an ideologically motivated policy change in 2025. Whether this takes the shape of long-term positioning or short-term speculation will depend on how much markets believe the rhetoric will translate.
Falling Sales, Increased Inventories, and the Red Flags for Analysts
As we read through the April 2025 U.S. wholesale trade report, the muted 0.1% month-over-month sales gain—well below the consensus of 0.2% and the previous month’s gain of 0.8%—predicts weakening economic momentum. While the 6.0% sales growth over the past twelve months may be comforting on the surface, the month-to-month drop is evidence of underlying instability that will temper expectations for vigorous consumer-led recovery. At Zaye Capital Markets, this inconsistency is taken as preliminary evidence of weakening final demand, perhaps as results of stricter financial conditions and risk-averse behavior of companies
Adding to this concern is the 0.2% expansion in wholesale inventories, which suggests that companies are stockpiling more than they’re selling. Past inventories’ buildup has presaged periods of economic retrenchment, such as those experienced before recession, as observed by the National Bureau of Economic Research. The implication is two-pronged: first, wholesalers are preparing for supply disruption or weakening demand further down the track; second, inventory surfeits have the tendency of bringing on price cutting, margin squeezing, and pressure on profit—particularly in businesses with fixed costs or low asset-turnover ratios.
Strategists need to watch more closely for inventory-risk-exposed groups—i.e., consumer discretionary and industrials. Retail-related equities with lofty inventory-to-sales ratios could be vulnerable to margin squeeze over the next few quarters. Conversely, undervaluation signals flash in staples and healthcare equities, with defense and pricing strength remaining intact against broad market weakness. Relative safe haven could be in these groups with the macro environment shifting from expansion into possible correction.
ETI Sounding the Alarm for Labour Market Amid Trade Tensions
The April 2025 decline in the U.S. Employment Trends Index (ETI) to 107.57 represents a turning point, reversing its rising trend since late 2023. The -1.62% year-on-year change might seem relatively modest, but this decline in this leading indicator does not augur well for diminishing momentum in payroll growth. At Zaye Capital Markets, our take is that this is an early harbinger of softening labour market conditions, and this is concerning given its past track record of leading ahead of changes in jobs cycles.
Historically, ETI contractions have also foreshadowed hiring decelerations, typically ahead of more generalised retracements of the economy. Inspection of past cycles—most recently the recession of 2008—suggests that softness from the index has typically foreshadowed hiring lagged in those industries most sensitive to macro uncertainty. The current rollback, shallow as it is, is also consistent with labour softening early in its cycle and suggests the case for cautiously bearish hiring prospects for hiring-intensive industries such as transport, freight, and retailing.
Analyst attention should be focused on escalating U.S.–China tensions in 2025, already poised to influence recruitment intentions and investing strategies. Tariff risk will not be immediately apparent for the ETI drivers, but is beginning to feed through into sentiment. Labour-intensive consumer discretionaries possess valuation-downside risks, while utility and technology—where recruitment is more strategic and there is more margin strength—provide relative value for those investors interested in hedging against labour headwinds in the cycle.
Job-Find Confidence is Falling, Revealing Labour Market Structural Tightness
New York Fed’s most recent statistics from its May 2025 consumer survey paint a dismal picture of American labour market sentiment. The three-month probabilities of obtaining jobs averaged below 40%, down dramatically from levels of over 60% in 2014. In our opinion, this is more than just a cycle trough—this collapse of labour market perceived job availability reflects deeper, more structural problems continuing to erode the labour market’s resilience in the post-pandemic, more automated economy.
Historical FRED comparisons indicate that previous declines in job-finding probabilities have presaged declines like the one of the 2008 crisis, in which economic disruption intertwined with skill imbalances and hiring freezes. Now, all this is being supplemented with further momentum coming from accelerating technological displacement. A 2023 NBER report illustrates this vividly, showing mid-level job prospects—chiefly for operations, clerical, and customer service jobs—to be increasingly eroded by AI and process robotics, generating an increasingly large body of structurally displaced workers even in the midst of general economic stability.
This change in mindset should raise alarm bells for those observing. The fact that sentiment did not improve even during the May bounce raises questions over headline jobs figures and the effectiveness of conventional stimulus in compensating for labour disruption. In terms of equity valuation, mid-skill labour-intensive industries—commercial real estate services, traditional retail, and hospitality, for instance—may be facing a long-term margin squeeze. Those who are engaged in digital infrastructure, AI services, and premium-end professional services, on the other hand, could be undervalued in the market and offer discounted opportunities as money flows into new-generation models of doing business.
Employment Diffusion Index Points To U.S. Hiring Sluggishness
The Employment Diffusion Index in May 2025 falling to 50% is a leading indicator of narrowing job growth breadth among industries in the United States. The index, derived from 50 state and 389 metropolitan statistical area employment activity, reflects how broad job increases—or losses—are among industries. A reading of 50% signifies layoffs and hiring being in equipoise and a lack of breadth akin to the advance warnings of slowdown cycles in previous decades. We find this an acceptable early warning sign in Zaye Capital Markets’ perception of job creation pace losing vigor in a synchronized and systemic fashion.
Historically, diffusion readings below 55% have been strongly associated with periods of weakened economic vigor. A 1970s NBER study tied such declines to starts of recessionary periods as losses in leading industries spilled over into widespread economic weakness. Contrasting with breadth and vigor with which job increases basked in the early portion of the decade, present flatness refers to rising frictions—increasing credit expenses and deferred business investment—impinging on hiring decisions across the board. The contraction one observes here is not the result of noise in the cycle but a manifestation of strain deeper down.
Market strategists will need to do a tactical re-shift in response to this softening breadth. Labour-intensive sectors such as construction, retail and manufacturing will be facing margin squeeze and less earnings visibility in the coming quarters. Opportunities to buy into undervaluation will be in selective technology, healthcare and capital-light service industries where hiring remains more lopsided, margins remain firmer and revenues remain less exposed to macro headwinds. These also happen to be the industries where the employment diffusion index is on relative strength—and where forward-looking capital next must be rotating.
Diverging Inflation Expectations Highlight Structural Housing Pressures
The New York Federal Reserve’s Survey of Consumer Expectations in May 2025 illustrates a striking difference in inflation expectations: while food inflation expectations have softened to below 5% from a high of over 10% in 2020-2021, rent inflation expectations remain at 8.4%. We find this a revealing difference between transient and structural pressures. The steep moderation in food inflation reflects normalisation in global supply chains, but the persistent squeeze in rent inflation expectations hints at deeper issues in the residential property sector.
The stabilization in food price expectations indicates supply-side disruptions have reversed mainly, making way for effective pricing among key items. Housing costs continue to be influenced by supply bottlenecks, elevated mortgage levels, and demographic forces in favour of re-consolidation in cities. A 2024 report from the Fed notes that housing inflation has far less elasticity and what is done to it is as much a function of policy as of zoning restrictions, a decade of underbuilding, and rent demand relative to unit supply. Such rent expectation stickiness not only increases headline CPI but also squeezes real disposable incomes, most acutely among middle-bracket families.
For strategists, this divergence has a tactical implication for equity strategy. Consumer staples may be nearing value as food inflation expectations moderated. But residential real estate investment trusts (REITs) and property managers may possess yet to be realized upside, as high rent growth supports income yields in the face of macro headwinds. With cost pressures from food ebbing, portfolio rotations may begin to favor real asset plays on housing—specifically with pricing power and minimal leverage—as underpriced hedges against continuing shelter inflation.
CMBS DELINQUENCIES REFLECT AN UNEVEN COMMERCIAL PROPERTY RECOVERY
The spiking of Commercial Mortgage-Backed Securities (CMBS) delinquencies—10.59% in office properties as of May 2025—is a break from the narrative of the commercial real estate sector. We at Zaye Capital Markets interpret this break with the industrial sector’s near-flawless 0.11% delinquency rate as a structural repricing of asset classes in accordance with reshaped post-pandemic work realities. With work-from-home being an entrenched trend in technology-centric metros in particular, demand for traditional office space remains anemic, draining rent rolls and triggering covenant breaches in legacy CMBS structures.
New data from TreppWire supplemented by NBER reports confirm the distress as being extremely localized in high remote take-up markets—where office vacancy rose into double digits by 2024. Warehouse and fulfillment facilities, however, buoyed by ongoing e-commerce growth and sound supply chains, show sub-6% vacancy and positive renewal of leases. This dichotomy reflects broad re-direction of capital away from traditional office properties and into industrial REITs and data facilities where tenant activity and property cap rate compression remain buoyant.
Experts will need to regard this as sector-wide re-pricing and not a cyclic real estate correction. Office-heavy CMBS pools remain exposed and refinancing will be difficult in the climate of higher-for-longer rate assumptions. Meanwhile, there will be undervaluation hints in new warehouse and logitics buildings with last-mile delivery opportunities. Against this, experts will need to monitor local policy experiments—such as office-to-residential conversion schemes—as catalysts to ease pressures on underperforming inner-city property submarkets.
Stable Inventories Equate to Peace of Mind—Beware of Tomorrow
The U.S. wholesale sector inventory-to-sales ratio was unchanged in April 2025 and continued its downtrend after the 2022 peaks and returned to pre-pandemic levels. On a surface level, this trend in our analysis at Zaye Capital Markets signals normalisation of supply chains. It indicates increasingly smooth inventory movements and increased production and consumption correlation. Such stability may never be taken to be an absolute sign of economic strength—it marks a very narrow window of time when supply chains are lean but potentially weak.
Historically, as U.S. Census Bureau data indicate, severe inventory-to-sales imbalances have run alongside broad economic shocks—financial crisis in 2008 and 2020 pandemic—while periods of prolonged tranquillity have sometimes masked the built-up weaknesses in the chain farther down. The current convergence with pre-2020 levels on a 3.5% inventory adjustment in the 2022 Economic Census says as much about improved inventory management techniques as about leaner buffers. This will be compressing corporate maneuverability in the face of sudden demand reversals, rising interest rates, or global logistical disruptions.
This phenomenon must be viewed by macroprudential analysts. While inventory lightness will contribute positively to margin improvement and reduce holding costs in the short run, companies will be made more vulnerable to demand shocks or shortages in inputs. From a valuation perspective, supply chain sensitive industries such as automotive, consumer electronics and fashion may be valued too optimistically. There may be value opportunities in companies with improved supplier diversification and elastic logistical configuration. Such companies will be best suited to withstand volatility if today’s peaceful ratios lead to a subsequent storm.
Decline in Inflation Expectations but a Mixed Reality
Five-year-ahead consumer inflation expectations softened to 2.8% for May 2025—the lowest level since January 2024—according to the New York Fed’s latest survey. This downside on Zaye Capital Markets reflects a softening in longer-term inflation perception likely from recent moderation in energy and stabilization in global supply chains. While this trend relieves some of the pressure on the Federal Reserve to maintain policy on a restrictive trajectory, this also results in consumers adapting to improving headline inflation prints.
Historically, inflation forecasts have served as an important monetary policy transmission channel. NBER analysis suggests a 1% decrease in expected inflation will lead to diminished discretionary expenditure and facilitate an economic slowdown theme and even induce a dovish policy tilt by policymakers. To this extent, current events provide a rationale for rebalancing of rates if inflation below 3% is realized without a considerable employment trade-off.
But there increasingly is a disconnect between survey sentiment and consumer reality. Low-income households anecdotally have reported ongoing pressures in staples and utilities even when survey sentiment was upbeat. Such a disconnect tests sampling techniques and potential blind spots in the numbers. The takeaway for players in the market is obvious: while inflation-related assets can expect diminished upside pressures, analysts need to be vigilant. Staple and utility stocks can remain undervalued to the extent in which real inflation pressures cut back on purchasing habits in ways not reflected in the numbers.
ETF Flows Suggest Risk Rotation as U.S. Equities Halt
This was accompanied by a major $3.36 billion U.S. large-cap ETF outflow versus a $3.05 billion aggregate bonds inflow. We in Zaye Capital Markets interpret this as a response to declining risk appetite in the wake of increasingly uncertain U.S. economic signs. The bond movement suggests a quest for the safety of yield in an arrangement where equity valuations seem to be at extremes and macro headwinds are dominating.
This was augmented by another $0.78 billion being withdrawn from U.S. small- and mid-cap ETFs. Historically these have come with rising bond yields and declining investor sentiment—seen in the 2024 Federal Reserve reports. With rebase and slowing down in earnings estimates, smaller-caps remain sensitive to margin pressures and interest rate sensitivity and hence out of favor. The fixed income rotation suggests positioning for a potential late-cycle or policy pivot in the event inflation is moderated.
Interestingly enough, global equities witnessed $1.89 billion of inflows as there has been a bias toward diversification as the U.S. equity leadership falters. This may be being partly fuelled by relative outperformance in European small-caps as our recent work across markets has highlighted. Global equity positioning currently stands in need of a new review by strategists. As U.S. equity leadership falters, potential for undervaluation may be in international groups with positive currency exposure or policy support or inflation-adjusted relative return potential. Allocations in the present scenario into high-quality global dividend payers and bond-proxy equities can be a strategic option.
Smaller business confidence rises while fault lines lie beneath
The NFIB Small Business Optimism Index increased to 98.8 in May 2025, ahead of forecasts and continuing a sentiment recovery. We find this surge a favorable precursor to near-term business activity bolstered by increased plans for fixed investment spending, enhanced sales prospects, and less stringent credit conditions. This portends enhanced liquidity and risk appetite among small businesses—a prime metric of grassroots economic prosperity. Precedents also have a caveat: a 2021 Federal Reserve report concluded such optimism tends to be accompanied by overinvestment and vulnerability to subsequent financial shocks in later-cycle phases.
Below the title of the banner, bullet points show underlying weakness. Waning optimism in earnings and pay suggests that despite favorable macro signals, margins remain in jeopardy. This inconsistency will be in lockstep with a 2023 NBER paper demonstrating how small businesses will prioritize growth and customer acquisition ahead of wage increases in recovery cycles. While this policy in the short run will be one of expansion, this risks aggravating retention where the labor pool remains competitive.
Also noteworthy is the moving away from inflation and toward taxes as small business owners prepare for the potential impact of 2025 tax reform. While models suggest these declines will add 1.1% to long-term GDP, there’s a policy risk from fiscal ceiling uncertainty—particularly under the Byrd Rule. The lesson from the marketplace perspective is domestic small-cap related names may be moving up on a sentiment wave rather than substance. Analysts need to look to rotate into cheap names with good balance sheets and pricing power as well as into those less exposed to policy changes and wage sensitivity.
Taxes and Tariffs Become Small Businesses’ Major Concerns
A major change in May 2025 was taxes—perhaps tariffs—becoming the number one single concern of small business in place of inflation or labor quality, according to the latest NFIB numbers. As we look at this here at Zaye Capital Markets, this reflects an unmistakable sign that fiscal and trade policy uncertainty now weighs heavily on small business attitudes ahead of input cost or labor concerns. With 35% of owners citing tax as the single biggest concern, this reflects growing concern over the potential for U.S. tariff regimes and future tax code reform.
NFIB’s previous reports had labor quality and inflation being front and centre, but recent policy surprises altered the math. A 2024 PIIE study warns returned Trump policies—mass deportations and increased import tariffs, for instance—will fuel inflation as high as 7.4% by 2026. This challenges current talking points that cost stability has been completely regained. Small businesses are very attuned to this, with most anticipating cost pressures but not wanting to pass them on to customers, Main Street Alliance’s 2025 survey says. This will erode margins, particularly for industries like hospitality, retail and manufacturing.
Analysts will have to look beyond headline inflation readings and second-level consequences. The tariff-impact industries—electronics, textiles, and agriculture—are certain to witness cost absorption and implied vulnerabilities. Conversely, the threat of undervaluation will be in there in those industries with deep domestic value chains, scalable pricing models, and minimal trade volatility exposure. Under these circumstances, the companies capable of maintaining profitability regardless of price pass-through will be at the forefront with policy-induced inflation risks once again in play.
Upcoming Economic Events
Core CPI m/m, CPI m/m and CPI y/y – The Spotlight on Inflation Path
Now in the middle of the trading week, attention now lies with the day’s inflation numbers—Core CPI m/m, CPI m/m, and CPI y/y—a trio that will be the marketplace’s go-to measure for inflation pressures and monetary policy direction. These releases not only play a pivotal position in influencing consumer cost drivers, but these will also be influential in informing the next Federal Reserve action. We at Zaye Capital Markets find this data point a key juncture: a change in either direction can induce massive across-asset rebalancing, particularly with current market pricing perilously straddling inflation anxiety and hoped-for growth.
If the inflation prints higher than expected
Should the inflation report be higher than one expects—either in headline or core—the implication will be that price stability remains out of reach and the market will likely interpret this as such. This will most likely lead to Treasury yields rising on increasingly expected future Fed tightening or an even later rate-cut cycle. The U.S. dollar will likely rise and will be strongly supported against low-carry currencies as markets expect a higher-for-longer rate cycle. Equities, most notably those from the growth-sensitive sectors of technology, consumer discretionary, and real estate, may be hit with selling as rising yields stretch valuations. Financials will be supported by upward-sloping rate expectations.
If inflation prints below forecasts,
Conversely, below-expected CPI prints will lend support to the narrative of disinflation occurring in recent months. Under such a scenario, hopes of a policy reversal by the Federal Reserve will get a leg up, and rate cut calls in subsequent months will be enhanced. The risk assets will rally in tandem with each other with rate-sensitive home and tech names leading. Treasury yields can fall marginally, the dollar will weaken moderately, and precious metals like gold will get renewed attention as real yields get compressed. This will be a plus for consumer and small-cap stocks too as declining rates reduce borrowings and purchasing power.
One way or another, this inflation print will be met and will be designed to reverberate in global markets. The increasingly complex macro backdrop calls for strategists to review sector exposure, currency positions and yield curve positions. Whether inflation sticks or if and how it tapers off from here, this CPI print may serve as a tone-setting event for the remainder of Q2 and redefine the direction of the Fed into H2 2025.
Stock Market Performance
Markets Rally from Lows but Display Upper-Level Softness
U.S. equities continued to rise from April bottoms but below index-level recovery highs, with average member performance remaining weak. Through June 9, 2025, the discrepancy between headline returns and constituent-level losses reflects a continuation of a marketplace struggling with internal weakness and narrow leadership.
Here’s the latest U.S. key index breakdown
S&P 500: Rally Remains Intact but Damage Underneath
S&P 500: 2% YTD | 21% from 4/8/25 low | 19% from YTD high | Avg. member: -23%
The S&P 500 inched into year-to-date positive, +2% YTD, on the strength of a +21% recovery from April’s low. But a -19% fall from its YTD peak and a -23% average declining membership indicate narrow breadth and concentration risk. The rally remains somewhat mechanical rather than broad-based as mega-caps cover up pervasive weakening.
NASDAQ: Revival of Growth Remains Elusive
NASDAQ: 1% YTD | 28% from 4/8/25 low | down 24% from YTD high | Avg. member down 44
The NASDAQ has recouped some of what has been lost with a current +1% YTD and a +28% rally. But a -24% correction from highs and a staggering -44% average member drawdown show numerous high-beta technology and growth stocks still deep in the red. This shows weakness in the growth complex even in the face of decent top-line performance.
Russell 2000: Small-Caps Remain Unable to Gain Momentum
Russell 2000: -4% YTD | +22% from 4/8/25 low | -24% off YTD high | Avg. member: -37 The Russell 2000 remains down YTD by -4% even after its +22% recovery rally from the April low. A peak-to-trough decline of -24% and an average drawdown of -37% indicate continuing investor wariness in getting back into small-cap risk in the face of tight financial conditions and macro uncertainty.
Dow Jones: Defensive Bias Mitigates the Decline
Dow Jones: 1% YTD | 14% from 4/8/25 low | -16% from YTD high | Avg. member: -23 The Dow Jones is fairly resilient with a +1% YTD performance and a +14% recovery from its April bottoms. A mere -16% correction from the highs is the lowest in the major indexes and an expression of the index’s defensive tilt. The resilience though is selective and not widespread with average member declines of -23%.
We remain focused on breadth gauges and intra-index spread as our key risk monitors. While surface-level recoveries appear favorable, key gauges suggest the equity rally may remain at risk short of a wider participation.
Strongest Sector in All These Indices
Industrials Lead the Way with Significant Year-over-Year and Month-over-Month Increases
To date, up to and inclusive of June 9, 2025, the sector star of the S&P 500 index universe is clear to us at Zaye Capital Markets: Industrials. We note Industrials outperforming on a year-to-date basis and also with a firm month-to-date upside—both signs of structurally resilient and conviction investor demand for cycle exposure.
Industrials: +9.6% YTD | +1.3% MTD The sector has recorded a strong +9.6% year-to-date performance, the best among all the index’s industry groups, pointing to broad-based strength from infrastructure demand, shipping industry recovery, and good quality orders for capital goods. A +1.3% month-to-date performance also testifies to ongoing rotation into Industrials as investors look for exposure to sectors that are profiting from fiscal spending and global manufacturing recoveries.
Other year-to-date sector leaders like Utilities (+5.8%), Consumer Staples (+5.5%), and Financials (+5.3%) pale in comparison to the size and persistence of Industrials’ outperformance. With inflation normalizing and capex cycles continuing to be in effect, Industrials remain the powerhouse in this setting—beating defense and peers with higher concentrations in technology.
For portfolio managers and analysts, such continued outperformance serves to validate Industrials’ leadership position and the sector’s value as a core holding in an otherwise disparate equity environment.
Earnings
Yesterday’s earnings — June 10, 2025
GameStop Corporation
(GMGameStop) posted Q1 sales of $732.4 million, down 17% year-over-year, below the ~$750 million consensus. While the sales collapse was led by a 32% decline in hardware and accessories, the firm was in the black with adjusted earnings of $0.17 a share and net earnings of $44.8 million versus a $32.3 million loss in the prior year. The company cut SG&A down to a mere $228 million and revealed that it had 4,710 BTC, which helped to bolster earnings by its crypto exposure.
Profitability in GameStop was aided by aggressive cost-cutting and profit from its bitcoin investments. The core retail business remained under strain though, and sustainability will be a factor of success with digital expansion and volatility in crypto assets.
The following companies did not disclose any earnings on June 10
- The J.M. Smucker Company
- Core & Main, Inc.
- GitLab Inc.
- Academy Sports and Outdoors, Inc.
- United Natural Foods, Inc.
Today’s Earnings — June 11, 2025
Oracle Corporation (ORCL)
Oracle reports fiscal 2025 Q4 earnings after close. The Street forecasts earnings per share of $1.64 and $15.58 billion in revenue with ~54% year-over-year OCI growth. Investors will be looking for insight on AI-related demand, margin recovery from high cloud infrastructure spending, and conversion of its $48 billion in signed cloud deals. Focus on OCI development, future cloud margin performance, and cloud capex trend commentary by the management will be important in gauging post-earnings momentum.
Chewy Inc.
(Chewy) reports earnings before the market and is expected by the Street to post EPS of $0.17 on $3.08 billion in sales. Active customer base will rise by ~3% year over year to 20.6 million due to Autoship subscription increases. Chewy provided FY2025 net sales and EPS guidance of $12.3-$12.45 billion and $0.30-$0.35.
Investor attention: Most important to track are customer retention, Autoship subscription strength, margin and pharmacy trends, and confidence in full-year estimates.
Stock Market Update for June 11th, 2025
U.S. stocks advance in subdued manner as they grapple with a tug of war between macroeconomic variables, geopolitical developments and sectoral forces. A fresh spike in Treasury yields and fresh trade policy anxiety constrain risk appetite as investor sentiment remains cautious around inflation readings and leadership in the technology sector.
Stock Prices
Political noise and crosscurrents in economics
Markets are reacting to political tensions—particularly between top technology executives and the president—along with inflation data momentum concerns. Traders have been encouraged to go defensive by rising Treasury yields and threats of tariff reinstatement. Broad-based investor sentiment was cooled down even with isolated patches of positive numbers in financials and industrials.
Magnificent Seven and S&P 500 Pressure
The sudden 14% decline in Tesla last week—a product of the Twitter spat between Tesla CEO and Trump—demonstrates how mega-cap concentration skews aggregate sentiment in the marketplace. Tesla alone represented nearly half of the S&P 500 and Nasdaq 100 one-day declines, and this highlights how the volatility of one mega-cap can bring down indexes with them. The risk involved with being overweight in the so-called “Magnificent Seven” and the risk involved with double-counting ETF holdings is highlighted by this consideration.
Major Index Performance to June 11th, 2025
- Nasdaq Composite: +0.3%
- S&P 500: +0.1%
- Dow Jones Industrial Average was unchanged
- Russell 2000: Stable with minimal movement
Indices show small advances or flat trade as sentiment remains level as participants balance firm pockets—such as rebounds in technology and strength in the financials—while considering policy risks and rate pressures. In the short term, however, players will be closely monitoring ahead economic data (yield movements and inflation) and geopolitical developments regarding tariffs and communications from large-cap names. These will be the most important drivers of investor positioning and participation by sector.
Gold Price on Wednesday, 11th June 2025
Gold was at $3,334.65 an ounce as of June 11, 2025—the latest confirmed spot price—during a moderate recovery from overnight’s level at nearly $3,326.90. The metal’s price reflects immediate demand for the metal as a hedge in a politically charged climate where there’s economic risk. Trump’s belligerent rhetoric—his broad critique of Federal Reserve policy and characterization of the “broken American economy”—remains fueling uncertainty regarding central bank independence and fiscal responsibility. Such noise tends to fuel safe-haven demand and provide supportive underpinnings for gold. Meanwhile, markets will remain in look-out mode for inflation prints later in the day (Core CPI m/m, CPI m/m, CPI y/y): a tame print will anchor rate cut assumptions in advance and reduce the dollar even further, providing the bullion with extra tailwinds. More aggressive inflation prints will, conversely, be likely to provide a lift to Treasury yields and put upward pressure on real returns, and limit upside in the metal. Generally speaking, gold’s price remains at the nexus of political risk, macro data and Fed assumptions—keeping it in the investor spotlight.
Sluggish sales in yesterday’s wholesale and chronic imbalances in inventory spurred a defensive economic climate, quietly underwriting the theme of gold as a hedge against policy mistake or stagflation. While markets digested this softer news, gold remained steady with this suggesting investor faith in short supply. Should today’s reading of CPI be dovish in tone, this will solidify gold’s role as a defensive bet; otherwise, expect the range-trade as investors adjust with higher yields and the strength of the dollar in the limelight.
Oil Prices on Wednesday, June 11, 2025
Oil currently trades at $64.77/bbl for WTI and $66.63 for Brent. Prices weakened today following signs of China’s softening demand—May crude oil imports dropped 3%, and refined product imports plunged 12.9%. The consumption slowdown calls into question the strength of global demand recovery. OPEC+, on the other hand, continues with its staggered reversal of production reductions and will add 411,000 barrels per day in July and introduce near-term supply pressures. Weaker U.S. wholesale sales and inventory advances yesterday added to the subdued tone but contributed to a bearish tilt in commodity markets.
Trump’s renewed bashing of the Federal Reserve—blaming the central bank for cutting off credit to small business and economic momentum—added to the policy anxiety in the energy complex. His populist energy self-sufficiency and antiglobalist appeals will embolden surely American producers but also risk spooking OPEC+ nations’ exporters already looking at U.S. supply plans. While such rhetoric in the past has boosted sentiment for U.S. shale producers, however, it also injects volatility into global coordination on production levels. With the world holding its breath ahead of today’s release of the CPI number, a soft inflation reading may be a fillip to oil prices by alleviating Fed fears and weakening the dollar while an upside surprise will cause more selling by reinforcing the strong dollar and firmer monetary policy. The oil complex remains precariously poised between political signals, economic data and changing supply-demand fundamentals.
Bitcoin Prices on June 11, 2025
Bitcoin sits at $110,880 with its top Tuesday close this year hitting $110,710. The cryptocurrency sustains firm institutional buying—BlackRock took in $82 million in one day in its ETF on bitcoin and Grayscale GBTC registered its greatest three-month high daily intake. MicroStrategy increased its holdings to 585,500 BTC and witnessed confirmation of rising allocations in pensions by analysts at Fidelity. Dominance for the cryptocurrency has risen to 56.5%—its greatest level since January—serving as a sign of rising conviction. Yesterday’s soft U.S. wholesale numbers and moderate inflation readings create hope for the Federal Reserve softening its monetary policy—fueling bitcoin as a macro hedge against yielding real yields in stagnation.
Trump’s vocal enthusiasm around Bitcoin is accelerating narrative change. His declaration of “Bitcoin as an escape from the central bankers’ cage” solidifies his position as a pro-crypto candidate and reinforces sentiment around fears of fiat destruction. A sequence of Trump and ally comments—advocating for a national Bitcoin treasury, the addition of BTC payments in Trump Media, and drawing an equivalence between “freedom” and Bitcoin—are politically charging the ecosystem. Combined with policy attention (i.e., U.S. Treasury talk of accepting BTC as collateral for bonds and state-level BTC tax payment pilot programs), the context remains structurally positive. The ecosystem is growing too with Coinbase auto-staking of BTC, new Arizona state mining rewards and Cantor Fitzgerald strategic loans. Overall, this intersection of macro softness, regulatory clarity and institutional onboarding and political backing is creating a potent feedback loop propelling Bitcoin into new cycle highs.
ETH PRICES ON JUNE 11, 2025
Ether sits at approximately $2,785.78 on the strength of institutional buying and whale activity. Ethereum ETFs have also seen steady inflows—nearly $300 million in the previous week—taking ETF assets managed to over $14 billion and cementing institutional confidence in ETH’s long-term application. Ethereum futures open interest has also hit a new high of $40 billion and a whale made a $7.3 million profit on a 30,000 ETH sale, demonstrating massive liquidity and high levels of marketplace participation.
But this optimism is moderated by opposite whale action. Over the weekend, a few whales sold 9,845 ETH (approximately $25 million), and idle wallets sent 4,732 ETH to exchanges, thereby exerting short-term selling pressure. Meanwhile, there remains enormous whale accumulation with $364 million worth of ETH being purchased in a single day—hope for future upside driven by staking potential and ETF-based legitimacy. Overall, such flows suggest a situation in which, while institutional purchase and whale accumulation will be providing Ethereum with its mid-$2,700s level of support, indiscriminate whale-led profit-taking actions will be generating considerable short-term volatility.
