US Stock Market Sets Record, S&P 500 and Nasdaq Surge

The United States stock market once again broke records on Friday, June 28, 2025, as the S&P 500 and Nasdaq closed at their highest levels in history. The surge in these two major indices was fueled by optimism over a US-China trade agreement, easing geopolitical tensions in the Middle East, and renewed confidence in the technology sector, particularly artificial intelligence (AI). Strong market optimism was reflected in capital inflows into leading stocks and speculation that the Federal Reserve would adopt a more accommodative interest rate policy in the second half of 2025.

S&P 500 and Nasdaq Hit All-Time Highs

The S&P 500 index closed at a record 6,173.07 points, surpassing its previous high set in February 2025. During trading, the S&P 500 briefly touched an intraday peak of 6,187.68. Meanwhile, the Nasdaq Composite also posted a new record close, in the 20,273 to 20,299 range, underscoring the dominance of the technology sector in driving the US market rally.

This surge was fueled not only by domestic investors but also by global institutions reallocating assets to US equities after tariff turmoil earlier this year. Confidence in America’s economic recovery and stability continues to strengthen as trade relations with China improve.

Impact of the US-China Trade Deal

The US stock market’s record-breaking performance was closely tied to positive developments in US-China trade negotiations. The US and China officially signed a framework agreement that restructured the export of strategic materials, including easing technology export restrictions from the US to China. This move was widely viewed as effective in easing investor fears of a prolonged trade war that had triggered a market slump back in April.

Additionally, news of a ceasefire between Israel and Iran in the Middle East reduced global geopolitical risk, particularly regarding energy price spikes that have long threatened the outlook for global economic recovery.

AI Sentiment and Technology Sector Boom

The positive sentiment was also driven by stellar performances from artificial intelligence-based tech companies. Shares of Nvidia, AMD, Amazon, and Meta soared after releasing earnings reports that beat analyst expectations. Nvidia’s market cap is approaching $4 trillion, further reinforcing Nasdaq’s bull market territory. The strong gains in AI-related stocks contributed significantly to Nasdaq’s new record high.

Analysts believe the trend of investing in AI and automation will continue to dominate the stock market, as demand grows for innovative technology solutions and digital transformation across industries.

Rate Cut Expectations Fuel Optimism

Recent US inflation data shows slowing price growth, with PCE inflation at just 2.3% and consumer spending down 0.1%. This has sparked market speculation that the Federal Reserve will soon cut interest rates in the second half of 2025. The probability of a rate cut is estimated at 20–27%, especially as discussions continue about a possible new, more dovish Fed chair under the Trump administration.

Investors have welcomed the prospect of looser monetary policy, which could boost economic growth and sustain the market’s upward momentum. However, some analysts caution that major index valuations are already very high and could be vulnerable to a correction if there are abrupt changes in the global environment.

Market Challenges and Cautions

Despite the renewed strength and record highs in the US stock market, several challenges remain, such as ongoing trade uncertainties, the potential for renewed geopolitical tensions, and the risk of price corrections due to elevated stock valuations. Investors are advised to remain cautious and diversify their assets to mitigate future market volatility.

With the S&P 500 and Nasdaq setting new records, the US equities market is demonstrating resilience and confidence amid global dynamics. However, the external environment remains fragile and will be a key factor for all market participants to watch closely in the coming months.