This month of June 2025 stands out for its exceptional momentum in the financial markets, with the S&P 500 reaching new all-time highs. This upward movement, often referred to as the “most hated rally,” remains largely underestimated and continues to generate significant skepticism among investors.
Despite the strength of the rebound, many still doubt its sustainability, which paradoxically fuels its continuation: widespread caution limits excess and maintains room for further upside should confidence return.
This rally follows the events of the spring: after the shock of Liberation Day in early April—marked by the introduction of new U.S. tariffs and a sharp market correction—the situation gradually eased from May onward. The partial suspension of these tariff measures and the resumption of dialogue between major economic powers restored investor confidence.
Recently, several very positive signals have further reinforced this trend:
- On June 26, the White House announced greater flexibility regarding the deadline for ongoing trade negotiations, which reassured markets about the risk of renewed escalation.
- On June 27, the announcement of a framework agreement between the United States and China marked a decisive turning point, paving the way for a gradual normalization of trade relations between the two countries.
- In addition, Switzerland also appears close to finalizing its own agreement, which would further strengthen stability and visibility for international economic players.
Remarkably, even the ongoing Iran-Israel conflict, which continues to generate serious geopolitical concerns, has not managed to derail this powerful stock market rally. The resilience of the indices in the face of such tensions demonstrates the strength of the current movement and renewed confidence in global economic prospects.
It is also important to highlight that the investment outlook is significantly better than it was back in February. Economic fundamentals have improved, inflation remains under control, and—most notably—the Federal Reserve is now adopting a more dovish tone: the central bank has signaled that it may ease monetary policy sooner than previously expected, further supporting risk appetite.
Looking ahead, we are convinced that this rally is likely to accelerate. The extremely short positioning of hedge funds, as revealed in our latest analyses, suggests that any upward movement could trigger significant short covering. This mechanical buying could amplify the rally in equities and, as a consequence, lead to a rebound in the U.S. dollar, which has suffered notably since the beginning of the year. With so many market participants caught offside, the conditions are in place for a potential squeeze that could drive both stocks and the USD higher in the coming months.
Finally, it is worth noting that in recent months, a certain correlation has been observed between Bitcoin’s movements and those of the U.S. equity market, with the cryptocurrency sometimes appearing to anticipate major stock market trends.
In summary, the combination of major diplomatic breakthroughs, a more accommodative trade policy, a friendlier monetary environment, continued investor caution, and surprising resilience to geopolitical tensions creates a particularly supportive backdrop for equities as June 2025 comes to a close. The target of 6,600 for the S&P 500 by year-end now appears credible, driven by this “most hated rally” that could continue to surprise many observers.
