SMID Cap Portfolio Review - June 2025
July 15, 2025
Stocks rallied for a second consecutive month in June, fueled by easing trade tensions, resilient economic data, and cooling inflation. A major catalyst came from a breakthrough in U.S.–China trade relations: the U.S. relaxed restrictions on semiconductor chip exports, while China agreed to resume rare earth exports to American buyers. This de-escalation reassured investors and contributed to growing optimism that the U.S. economy is headed for a soft landing - marked by moderate growth, low inflation, and no recession. On the economic front, the June jobs report exceeded expectations, with payroll gains and a drop in the unemployment rate to 4.1%. Wage growth remained solid, supporting retail sales and broader consumer spending. Meanwhile, the Purchasing Managers’ Index (PMI), a monthly survey of manufacturing purchasing managers, remained in expansion territory, extending the manufacturing sector’s recovery from its three-year slump between 2022 and 2024.
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