Tech Rally and Macroeconomic Stability Push S&P 500 and Nasdaq to New Highs

As of June 2025, both the S&P 500 and Nasdaq have reached fresh all-time highs, marking a strong summer rally in U.S. equities. The S&P 500 has gained 5% year-to-date, while the tech-heavy Nasdaq is up nearly 8%.

A mix of macro and micro factors is driving the trend. Geopolitical tensions have eased, particularly following trade agreements between the U.S. and key Asian economies. Meanwhile, inflation in the U.S. has cooled, with the latest CPI reading at 2.7% — below the Fed’s 3% soft target.

At the sector level, mega-cap tech stocks continue to dominate performance. Strong Q2 earnings from chipmakers, cloud providers, and AI infrastructure players have lifted investor sentiment. Concurrently, financials and industrials are rebounding, supported by modest economic growth and stable interest rates.

ETF inflows into equity markets are also fueling momentum. Index-tracking funds attracted $12 billion in net inflows in June alone, according to data from Edward Jones.

Despite the optimism, analysts are cautious. Equity risk premiums remain low, and bond market signals suggest a flattening yield curve, which may indicate slower growth ahead. For now, however, the summer rally appears intact — driven by earnings resilience and macroeconomic calm.