New York close: S&P blasts through Q2 finish line as bears wave white flags

The S&P 500 closed out Q2 like a freight train breaking through its own speed limit—another record high, another notch in the belt of one of the most aggressive snapbacks since late 2023. Up nearly 25% from its April lows, the index steamrolled through walls of skepticism to reclaim control of the tape. The Nasdaq didn’t miss the party either, riding tech momentum to fresh all-time highs. This wasn’t some window-dressed bounce—it was a full-blown momentum breakout with institutional flow in the slipstream.

Tech was the main engine, again. Apple surged ahead of the pack, while Oracle exploded higher on a $30 billion/year cloud pact—a deal that screams structural, not cyclical. Financials followed through as the Fed’s stress test cleared the runway for capital return. Monday’s move wrapped a month where the only real “correction” was portfolio managers correcting their underweights.

June's been the ultimate pain trade—positioning too light, disbelief too high, and now a mechanical chase higher. The S&P gained over 5% for the month, the Nasdaq more than 6%, and even the Dow tagged along with a 4% move. With Q3 now underway and allocators still sitting light, this melt-up has room to roll.

Beneath the surface, though, macro flashpoints are still simmering. Tariff D-Day—July 9—is fast approaching. Canada flinched first, yanking its digital services tax to salvage negotiations. Japan is still stuck in neutral, slow-walking any meaningful auto or agricultural concessions. The EU is dangling a blanket 10% tariff deal, but hunting for carve-outs. Meanwhile, Trump’s playbook remains unpredictable but potent.

Despite the noise, the market keeps grinding higher. Breadth is broadening, earnings are edging up, inflation’s behaving, and rate cuts are getting priced in like it’s policy déjà vu. Helping settle the twitchy long end, Treasury Secretary Scott Bessent made it clear he’s not about to flood the back end of the curve with duration, no appetite to launch a supply surge into a buyer’s strike. If anything, he's leaning into the view that cooling inflation will let yields drift lower without a fight.

Yes, there’s a fork in the road: rate cuts without growth could spook the tape. But unless we see a real jobs stumble, the default setting remains “rate cuts equal boost juice.” Traders are running that well-trodden script until it breaks. And for now, it’s not just intact—it’s working.

As we enter the second half, the trade barrier wall of worry is losing bricks fast. The institutional crowd is still playing catch-up. If earnings cooperate and the macro environment doesn’t derail, this train may not slow until positioning is fully maximized. Steady rate cut vibes could herald in the start of yet another melt-up, and the tracks are greased.

The view

Dollar drowns, equities Soar: Q2 wraps with the biggest divergence in decades

Markets just put a bow on a quarter that flipped the macro narrative on its head—stocks soared, bonds caught a bid, crypto ripped, oil rebounded, and the dollar faceplanted in historic fashion. Call it the “everything up, greenback down” trade. The S&P 500 and Nasdaq 100 didn’t just climb the wall of worry—they hurdled it, closing Q2 at all-time highs while the dollar posted its worst first-half since Nixon killed Bretton Woods in ‘73.

After April’s crisis-laced washout, the tape turned feral—ripping higher through May and June in what’s now the Nasdaq 100’s best quarter since Q1 of last year. Bad news was good news, rate cut bets got pulled forward, and macro landmines were either ignored or defused. It’s been a two-month momentum melt-up, and anyone underexposed has been steamrolled into submission.

Breadth broadened, earnings didn’t fall apart, and the AI trade has gone from fad to franchise. Sure, the Mag7 led the charge, but the rest of the S&P 493 quietly played catch-up—rotation without collapse. Meanwhile, soft and hard data both cratered in June, but instead of triggering a selloff, it greased the rate-cut runway. 2026 expectations exploded; 2025 stayed sticky. Traders know the drill: bad data + dovish Fed = buy the dip, again.

Meanwhile, the greenback got smoked. The DXY collapsed over 10% YTD—its worst start to a year in 52 years—and fell off a cliff in Q2, especially in June when Asian desks led the charge. What started as a slow drip turned into a coordinated dollar dump. Whether today was a month-end rebalancing (likely with US stocks soaring in June) or a real macro crack, the result was the same: the dollar lost altitude like a busted drone in a headwind. If U.S. desks are finally catching up to the dollar exodus that Asia started weeks ago, the buck could be in for a world of hurt. If the Euro is going to take out 1.2000, July is the setup month

Treasuries rallied across the curve in June, with the front-end outperforming but even the long end catching a bid. That was helped along by Treasury Secretary Bessent effectively telling the market, “We’re not dumping long bonds into a buyer's strike.” No new flood of duration, no firehose to fight—just a tactical pause while the market cools off. That alone took some tension off the long end, allowing yields to fall 14–17bps across the board.

Gold, curiously, didn’t catch the massive tailwind. After a blistering start to the year, it’s been stuck near record highs but unable to break out, even as the dollar unraveled beneath it. Technicals cracked a bit—briefly losing the 50DMA—but bounced at the broader uptrend channel. Still, for a metal that's supposed to move on currency debasement and geopolitical unease, it's looking more like a sleepy insurance policy than a hot trade into Q3.

Bitcoin, by contrast, ripped. Three green months, with June the weakest, but still a record quarter close. Crypto’s proving it can play both sides—risk-on when stocks fly, macro hedge when fiat stumbles.

WTI’s got its own wall of worry: geopolitical chop, demand head-fakes, and U.S. supply resilience keeping it from catching fire. But the bounce is fragile with OPEC expected to flood the market yet again.

July now rolls in with all the classic summer setup: buybacks entering blackout, earnings season on deck, and a calendar stacked with macro tripwires. ISM, payrolls, the July 9 tariff pause expiry—it’s catalyst season. The Fed meets at month’s end, and while a July cut is off the table, September’s very much alive. A dovish tilt amid limp inflation and soft growth? That’s fuel.

Add to that the hyperscalers (GOOGL, MSFT, AMZN) reporting late July into August—earnings that will either reinforce the AI boom or raise red flags.

And then there’s the budget bill. Hill drama may drag into early August, but watch the market playbook: any whiff of fiscal grease and traders will front-run it.

Technically, July is the strongest month of the year—seasonally speaking—and the first half even better. But complacency breeds blind spots, and the stool holding this rally—buybacks, rate bets, earnings—gets one leg kicked out soon. When that happens, the August air pocket might feel a little too familiar.

One last macro note: U.S. households have tripled their equity exposure over the last 40 years—without increasing their bond or cash holdings. That’s a lot of eggs in the same basket. If you're not diversifying by region, sector, factor, and size at this point, you're not managing risk—you’re rolling dice.