June Monthly Market Review
- Anthony Walters
- Jul 6
- 3 min read
June brought a wave of optimism to global markets, fuelled by a US-Israel-Iran ceasefire and a pause in new US tariffs, sparking one of the strongest short-term equity rallies in history. In this monthly market review, we unpack the key drivers behind the surge—including central bank decisions, inflation data, and standout regional and sector performance. While the rally was broad-based and led by the technology sector, diverging interest rate policies and ongoing geopolitical uncertainty highlight the importance of caution and diversification moving forward.
Tariffs, Tech & Turnarounds
ECB cuts rates, while the UK and US hold
US-Israel-Iran ceasefire fuels global rally
Oil rally? Just a ‘red herring’
The Balanced portfolio Index continued to rise, adding 1.50% for the month as markets gained thanks to a US-Israel-Iran ceasefire. In fact, the S&P 500 ETF has gained 22% over the last 12 weeks, which is one of the biggest short-term rallies in history.
Inflation and Interest Rates.
UK.
In June 2025, the Bank of England held interest rates steady at 4.25%, citing persistent inflation and global uncertainty. Inflation eased slightly to 3.40% in May, down from 3.50%, but remained well above the 2.00% target. Governor Andrew Bailey confirmed the rate path remains “downwards,” though any cuts will be gradual due to inflationary pressures and geopolitical risks.
U.S. Federal Reserve.
In June 2025, the Federal Reserve held interest rates steady in the 4.25%–4.50% range, for the fourth consecutive meeting, maintaining its projection for two cuts later this year. However, inflation expectations rose, with core PCE inflation now forecast at 3.10% for 2025, up from 2.80%, driven partly by new tariffs.
Chair Jerome Powell emphasised a cautious stance, citing uncertainty around inflation pass-through from tariffs and a slowing economy.
European Central Bank (ECB).
In June 2025, the European Central Bank (ECB) cut interest rates for the eighth time in a year, lowering its key rate to 2.00% amid easing inflation pressures. Eurozone inflation rose slightly to 2.00%, aligning with the ECB’s target, up from 1.90% in May.
The ECB signalled a potential pause in further cuts, citing persistent domestic price pressures and geopolitical uncertainty.
Market performance.
In developed markets, Norway gained 6.54%, as large index constituents (like Equinor ASA) benefitted from the short-term rally in Oil, due to conflict in the Middle East.
Switzerland was once again in last place among developed markets, falling by over 2%. Its largest constituent, Nestle, fell on downgrades from investment analysts who are less optimistic about growth at the global food company.
In emerging markets, Korea added over 15%, supported by strong price growth in Samsung.
Indonesia fell by 6.62%, led by a fall in financials in the region.
Sector performance.
Technology led for the month, making strong gains as US markets made new All Time High’s and investor sentiment in the US returned to ‘risk-on’.
At the other end of the scale, returns were still positive, even in the money-market sectors, which are known for their calm and stability.
Summary.
Markets rallied in June 2025, buoyed by a temporary ceasefire in the Middle East and a pause in US tariffs, which sparked one of the strongest short-term equity rallies in history. The oil rally proved temporary as just one week after the US conducted strikes on Iran, Crude Oil fell by over 11% once calm was restored.
Central banks diverged in their responses: the Bank of England and the Federal Reserve held rates steady amid inflation concerns, while the European Central Bank cut rates again but hinted at a pause. Market performance was strong across the board, with Norway and Korea leading regional gains, and the technology sector outperforming globally.
Despite the optimism, the mixed signals from trade policy and inflation trends underscore the importance of diversification and caution in portfolio positioning. Global leaders have rotated so far this year, with the US playing catch up by moving to new highs.
Sources.
The ‘Balanced portfolio benchmark’ is the UT Mixed Investment 20-60% Shares Sector.
Bank of England governor says interest rates path is 'still downwards' by Pedro Goncalves, Yahoo Finance UK, 24th June 2025.
UK inflation eases by less than anticipated ahead of Bank of England rate decision by Associated Press Finance, 18th June 2025.
Fed holds rates steady, stays on track for 2 cuts in 2025, by Jennifer Schonberger, Yahoo Finance, 18th June 2025.
ECB cuts rates again but hints at pause, by Balazs Koranyi and Francesco Canepa, Reuters/Yahoo Finance, 4th June 2025.
Eurozone inflation picks up to ECB target, by Reuters/Yahoo Finance, 1st July 2025
