Chaos? What Chaos? Wall Street Climbs Anyway

For the week ended 6/28/2025.

Go figure. The Middle East is in turmoil, tariff threats keep popping out of D.C. like rabbits from a magician’s hat (news flash: President Trump just cut off talks with Canada), the courts are churning out rulings that would make a trial lawyer’s head spin, Congress is doing its darndest to tack on another ~$3 trillion in debt, and political interference with the Fed is no longer a veiled threat but a talking point. Oh, and consumers? They say they’re increasingly pessimistic as the scourge of inflation keeps whacking their paychecks like it's 1979 all over again. Yes, price growth has slowed, but prices themselves remain sky-high. Let’s just call it what it is: financial altitude sickness.

I’m sure I’ve missed something, but you get the idea. And yet, in the face of this relentless churn – apologies if you’re still sipping your first coffee – the stock market is marching higher like Denmark didn’t just send a squadron of F-16s to Greenland.

Indeed, the S&P 500 just hit another all-time high and is riding a historic ~25% rally since the April tariff-induced low. Even the tech-heavy Nasdaq decided to join the party, clocking a new record last week. The numbers: domestic stocks rose 3.5%, foreign shares gained 3.0%, and bonds – yes, bonds – picked up 70 basis points. The only asset class left sulking in the corner was commodities, down 3.5%, largely due to oil prices falling after Israel (with the help of our stealth bombers, fighters, and submarines) crushed Iran’s war-making infrastructure.

In just a few short months, we’ve swung from tax-cut euphoria to fears of global trade wars and actual shooting in the Middle East. And now here we are, on the last day of June. What comes next? No one knows. So let’s enjoy the rally while summer burns on.

And while we’re at it, let’s not forget Europe, currently the hot hand in 2025. Investors across the pond are waking up to the financial reality that decades of social spending have a shelf life, especially as defense budgets surge. The result? Defense-related firms, both public and private, are shooting through the roof. According to the Carlyle Group, this is not just a moment, it’s a trend. If you’re looking for the “where” of future returns, this might be it.

Looking ahead: keep an eye on Thursday’s unemployment report. Until then, enjoy the fireworks, both the literal kind and the economic ones. May your Independence Day be loud, bright, and washed down with something cold and celebratory.

Have a great week.

Interesting data point of the week.

Source: Visual Capitalist

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