📬 WEEKLY MARKET PULSE​
​June 2–6, 2025 Edition​
Your Snapshot of Markets, Money Flow & Macro Trends

Markets continued their positive momentum into early June, supported by improving economic data, falling volatility, and a clear—if cautious—outlook on interest rates. Under the surface, sector and style dynamics provided a deeper signal of shifting investor preferences.

📊 June 2–6, 2025 Market Pul... Jun 7 · The Investor’s Edge: Spr... 8:25   ​

📈 Index Highlights: A Steady Rise

U.S. stock indexes posted a second straight week of gains, with the S&P 500, Nasdaq, and Dow rising between 1% to 2%, pushing the major averages to three-month highs. The S&P 500 remains just over 2% shy of its all-time high, hinting at a potential retest amid strengthening breadth and sentiment.

While small caps led with a 3.2% gain, compared to 1.6% for large caps, they still trail significantly year to date, highlighting a potential shift underway rather than a confirmed trend.

👷 Resilient Labor Market

Markets rallied Friday on an upbeat May jobs report:

• +139,000 jobs added, slightly above the 130,000 expected.
• Prior months were revised down by 95,000, softening the headline beat.
• Unemployment held steady at 4.2%, reinforcing the “resilient but moderating” narrative for labor markets.

This “Goldilocks” print—solid job growth without overheating—was seen as supportive of risk assets without accelerating rate hike fears.

🏦 Fed Rate Cut Outlook

Following the jobs data:

• Futures markets now expect the first rate cut in September.
• Two quarter-point cuts are currently priced in by year-end.
• The Fed is not expected to act at the June 18 or July meeting, reinforcing a "wait-and-see" policy stance.

This stable outlook has supported equity valuations, particularly growth and rate-sensitive sectors.

📊 Sector Standouts & Strugglers

🚀 Top Sectors:

• Healthcare: Led with +1.31%, backed by strong inflows in Small (+143%) and Micro caps. Momentum is building across biotech and medical tech.
• Financial Services: Gained +0.61%, supported by broad-based capital inflows, especially in Mid (+25%) and Small caps (+34%).

🚨 Lagging Sectors:

• Consumer Staples (-1.5%) and Utilities (-1.0%) were the worst-performing sectors this week. Despite being considered defensive havens, they bucked the broader rally—likely due to profit-taking and shifting sentiment as volatility declined.

💰 Capital Flow Watch: Style & Size

🔍 Key Takeaways:

• Small and Mid-cap Growth outperformed this week, consistent with heavy inflows into small/mid Healthcare and Tech names.
• Small Value remains weak YTD, but the +2.4% weekly gain signals a potential pivot.
• Mid Growth continues to lead YTD, with Technology and Financials likely key contributors.

🛢 Crude Awakening

Oil surged over 6%, marking its best week in six weeks. This move offset two weeks of prior declines and supported Energy sector stability, although capital flows in Energy remain mixed, with outflows in Small and Mid caps.

🧘 Market Calm Returns

Volatility dropped notably:

• The Cboe Volatility Index (VIX) fell from 18.6 to 16.8, its eighth decline in nine weeks.
• A sharp contrast to the April 8 spike of 52.3.

This signals growing investor confidence and likely contributed to flows into small caps and cyclical names this week.

🔍 Sectoral Stage & Technicals

• Basic Materials continues to look constructive: +27% in uptrend, low distribution, and strong Small-cap inflows (+36.8%).
• Utilities show high accumulation (9%), but weak price action may delay follow-through.
• Consumer Cyclical remains at risk with 83% in downtrend and uneven capital flows, signaling further potential weakness.

🧭 Final Takeaways

📊 Tactical Positioning Ideas:

• Lean into Growth: Especially Small and Mid Growth, where momentum and money flow are aligning.
• Healthcare & Tech: Particularly in the Small/Mid cap space, offer strong setups.
• Avoid Defensive Sectors: Staples and Utilities are losing momentum despite past strength.
• Watch the CPI: The upcoming Consumer Price Index release on Wednesday will be critical. April saw inflation moderating (headline: 2.3%, core: 2.8%). A further drop could reignite rate cut expectations and support equities.

🧭 Bottom Line:
The market is cautiously optimistic, supported by stable rates, declining volatility, and improving breadth. Sector rotation favors growth, innovation, and small caps, though macro events in the coming weeks (CPI, Fed meeting) will test that thesis.

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