S&P 500 on Course to Hit New All-Time High as Treasury Yields Drift Lower

Published: June 26, 2025 by Omor IE

Key Points

Stocks are heading higher as geopolitical tensions cool and Treasury yields pull back.
Investors expect interest rate cuts starting in September, especially due to pressure from the Trump administration.
U.S. Q1 GDP figures were revised lower, but the market is still bullish.
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The stock market is seeing a lot more bullish price action and has erased all its losses during the tariff scare this spring. The S&P 500 seems set to reach its all-time high soon, barring any immediate negative catalyst. This is due to investors being bullish on the Middle East volatility calming down and the Federal Reserve being more likely to cut interest rates.

President Donald Trump has been continuously ramping up pressure on Fed Chair Jerome Powell to cut interest rates. Wall Street anticipates a September rate cut, followed closely by another rate cut this year. Currently, Powell is still defending his stance on the current rate regime, stating multiple times that he believes tariffs could cause an uptick in inflation.

Inflation has moderated faster than expected in recent months, but many Fed officials have remained steadfast that they are starting to see the early stages of tariffs driving up inflation. Hence, they are not interested in facilitating rate cuts just yet. Treasury yields have still drifted lower due to increasingly aggressive calls for rate cuts from the administration.

Here’s a market update as of 11:20 AM (ET) today.

The S&P 500 is up 38.65 points, or 0.63%.
The Nasdaq Composite is up 133.36 points, or 0.67%
The Dow Jones Industrial Average is up 304.86 points, or 0.71%.

Wall Street Turns Bullish

The market outlook has gotten much rosier in the past 48 hours, simply due to the Iran-Israel ceasefire. The prospect of a Strait of Hormuz blockage, including a Middle East regional war that could’ve destroyed energy infrastructure across the region, is being priced out.

Lower Treasury yields and ongoing trade talks have also led to more bullish price action, though the April tariff pause is set to expire in June. The market has remained bullish so far despite some macro figures coming in worse than expected.

Macros

U.S. GDP quarter-over-quarter was revised lower to -0.5% vs. the -0.2% estimate due to lower consumer spending.
Jobless Claims came in at 236,000 vs. the 244,000 estimate.
Continued Jobless Claims at 1.974 million vs. the 1.95 million forecast.
Durable Goods at 16.4% vs. the 8.6% estimate.
Core Durable Goods at 0.5% vs. the 0% forecast.
Chicago National Activity Index at -0.28 vs. the -0.13 forecast.
U.S. PCE Prices Final at 3.7%.
U.S. Core PCE Prices at 3.5% vs. the 3.5% forecast.
U.S. Pending Homes Index at 72.6.
U.S. Pending Home Sales Change month-over-month at 1.8% vs. the 0.13% forecast.
Kansas City Fed Manufacturing at 5.
Kansas City Fed Composite Index at -2 vs. the -5 forecast.