June 20, 2025 Market Insight｜Profit-taking in U.S. stocks, wait-and-see mood strengthens as interest rates fall and the yen continues to weaken

This macro-market analysis is based on the fact that I (@mifseeThis is a record of my personal study to gain a bird's eye view of the daily macro environment when making investment decisions in the U.S. market. The contents may contain errors or differences from the actual situation. Please be aware of this before reading this report.

market insight

On June 20, 2025, U.S. stocks fell back on profit-taking. Interest rates fell in major economies, leading to capital inflows into safe assets. The dollar firmed and the yen softened. Crude oil and gold rise and a wait-and-see mood prevails ahead of next week's PCE index.

equity

U.S. markets were hit by profit-taking at all-time highs, with the S&P 500 falling slightly. Capital concentration in high-tech stocks continued, but lacked spread to other sectors. European stocks were softer, weighed down by political risks in France. Japanese stocks also weakened along with U.S. equities. Overall, the momentum of risk appetite is limited, with funds concentrated in a few themes.

bond

The yield on the 10-year U.S. Treasury note is slightly lower at 4.21 TP3T. Interest rates in major countries are under general downward pressure due to the interest rate cut in Switzerland and weak U.S. economic indicators. Markets are becoming more cautious about the economic outlook, and inflows into government bonds, which are safe assets, can be seen. Long-term interest rates in Japan also remained stable.

exchange (e.g. foreign)

The dollar held firm against major currencies. The Swiss franc plunged following the interest rate cut. On the other hand, the yen continued to soften in the upper ¥158 range against the dollar as the Bank of Japan's monetary policy normalization is expected to recede. The euro is trading higher due to uncertainty over French politics. Currency selection is clear.

commodity

crypto

Bitcoin fell below $65,000 and altcoins were all lower. Market sentiment is deteriorating as macroeconomic uncertainty has led to thin capital inflows into risk assets. Movements clearly suggest a decline in risk tolerance.

Macro Event Focus

• First half of next week: German Ifo Business Confidence Index. Noted as a leading indicator of the European economy.
• Second half of next week: U.S. Q1 GDP confirmed and Personal Consumption Expenditure (PCE) deflator. PCE is particularly important for predicting the Fed's monetary policy.
• Assumed scenario: If PCE falls short of market expectations, expectations of a rate cut will be rekindled and stocks will rise and interest rates will fall. If it is higher, the opposite reaction may occur due to concerns about prolonged tightening.

Market Insights Summary

The market will be in a wait-and-see mood ahead of the release of the inflation index (PCE), which the Fed will be closely watching. This is the time to manage risk thoroughly and prepare for increased volatility following the index results.

Market Insights Infographic