Next week marks the beginning of a new trading month and the second half of 2025, with Wall Street eager to see if recent stock gains can hold. After experiencing a sharp drop in early April, spurred by investors’ concerns over President Donald Trump’s extensive tariff policies that brought the S&P 500 close to bear market levels, stocks have rebounded significantly. On Friday, the S&P 500 reached a new all-time high, boosting optimism about potential trade agreements with China and other U.S. partners. However, much of those gains faded when President Trump halted trade discussions with Canada. Despite this, the three major indices are on track to end the first half of the year with healthy profits, with the S&P 500 and Nasdaq gaining over 4%, and the Dow Jones up more than 2%.
There’s a belief among some analysts, including BlackRock’s Rick Rieder, that markets could soar even higher later this year, highlighted during his keynote at the Morningstar Investment Conference. He suggested that the AI revolution could counteract inflation and drive the market upwards. July has historically been strong for the S&P 500, according to Ryan Detrick from Carson Group, who noted that the index has performed impressively in July over the past decade, making it the best month in the last twenty years. He mentioned that strong performances in the preceding months, like May and June, potentially signal a healthy bull market.
Yet, some remain cautious about July’s outlook, particularly as the 90-day tariff suspension is set to expire on July 9. The White House indicated that while deadlines may not be critical, extensions could be possible. Goldman Sachs analyst Andrea Ferrario warned that rising economic and policy uncertainties could lead to high volatility in the second half of the year, especially with tariff deadlines looming. Current market valuations could also suggest that stocks may be overvalued; the S&P 500 is currently trading at 23.3 times revenue, reminiscent of the dot-com bubble’s peak valuation of 24.4 times revenue.
Anthony Saglimbene, chief market strategist at Ameriprise, pointed out that the market’s trajectory heavily depends on the U.S. economic climate remaining stable. Next week is particularly crucial as various economic data, including June’s non-farm payroll numbers, are slated for release. Dow Jones economists predict a growth report of 115,000, down from 139,000 the previous month. Saglimbene emphasized that employment data is vital, asserting that consumer spending typically dips when job security is threatened. If employment figures appear solid, there might be a more favorable outlook for consumer spending despite the ongoing uncertainties related to trade and tariffs.
