Hey folks,
We’re nearing the end of June, and the market’s sending mixed signals.
On the one hand, the Nasdaq (/NQ) already above its year open has now hit new all-time highs.
But that’s not a surprise — it’s been the market’s favorite playground all year, especially with big names in AI, semiconductors, and cloud infrastructure pulling more than their weight.
The S&P 500 (/ES) came close, too — just 6.5 points away from setting a new record. That’s about as close as you can get without actually doing it.
But then there’s the Dow (/YM), sitting almost 2,000 points below its all-time high. And that’s what I’m watching.
Because while most folks like to focus on the S&P or the Nasdaq, the Dow still gives us a read on more traditional parts of the economy — industrials, banks, consumer staples, healthcare. It’s less flashy… but it’s important.
And right now the Dow’s just not buying into the party.
Part of that is the headline noise: We’ve got rate pressures, geopolitical tensions, conflicting inflation signals, and an election year in full swing.
That all makes it harder for institutional money to take big bets in the industrial sector — especially when tech is still doing all the heavy lifting.
But here’s why I’m not writing the Dow off.
With the end of June upon us, we’re about to close out the first half of 2025. And that’s a critical pivot point.
This is when fund managers reallocate, balance out gains, and look ahead to where they want exposure going into Q3 and Q4.
If we start to see even a hint of rotation into value or cyclicals in early July, the Dow could catch a bid — and that could help push the S&P to new highs and broaden the rally out.
And don’t forget — we’ve seen this setup before. Back in late 2023, it was tech that led the way early on, while everything else lagged behind.
But once the broader market caught up, the S&P and Dow both made strong runs. So this isn’t uncharted territory — it’s just a matter of whether the market finds a reason to rotate again.
And with Q2 earnings right around the corner, that reason may not be far off.
For now, I’m watching and waiting.
Stay sharp,
— Geof
