STOCK PRICE ANALYTICS 2025-H2 US STOCK MARKET OUTLOOK AS AT 8 JUNE 2025

STOCK PRICE ANALYTICS US STOCK MARKET OUTLOOK AT THE CONCLUSION OF THE 2025-Q2 REPORTING PRINT PERIOD AS AT 8 JUNE 2025

Broadcom (AVGO.NASDAQ) and Lululemon (LULU.NASDAQ) were the last companies in the S&P 500 Index to report first-quarter results for 2025 this past Friday (6 June 2025), in the 2025-Q2 Reporting Period, closing out what has been a strong 2025-Q2 Earnings Season for U.S. companies.

Approximately 78% of Public Companies listed on the S&P 500 reported earnings that exceeded Analyst expectations, with an average Upside Surprise of +8.3%. The S&P 500 is set to post earnings growth of nearly 13% in the first quarter, marking the third time in the past four quarters the index has seen double-digit earnings growth. While earnings estimates have been revised lower for the quarters ahead, full-year estimates are still calling for earnings growth of around 9% for the S&P 500. Stock Price Analytics opines that single-digit earnings growth is attainable in the US Equity Market in 2025, given the resilient economic backdrop, which should offer support to equity markets amid the uncertain policy environment.

Despite macroeconomic headwinds and headline volatility, S&P 500 companies delivered solid results during the 2025-Q2 Reporting Period, growing profits 12.5% year-over-year, the third quarter of double-digit growth in the past four. While earnings growth estimates for 2025 have been revised down from 14% to 8.5%, the 2026 outlook remains steady, pointing to the potential for reacceleration of Earnings Growth.

Notably, the forward 12-month earnings estimate has recently reached a new high, providing a fundamental anchor for rising US Equity Markets. While valuations have undoubtedly contributed to the recent gains, earnings appear to have also played an important role in supporting the current Rally from the April 2025 week one bottom. Since the April 8 low, stocks have gained significantly as a substantive recovery, with the S&P 500 Uptrending nearly 20%.

A Pull Forward by Consumers and Enterprise in demand for Goods ahead of higher tariffs may have boosted first-quarter Earnings results. Still, much of the upside came from the three growth sectors - information technology, communication services and consumer discretionary - which together account for over 50% of the S&P 500. Tech earnings grew 20%, communication services surged 33%, and consumer discretionary rose 8%, helping to restore investor confidence in this part of the market that fell briefly out of favor earlier this year.

Results also highlighted robust spending on artificial intelligence facilitated Microsoft reclaiming the title of world’s most valuable company at 3,496.12B Market Capitalization as at 8 June 2025.

Headline noise is a reality that Market Participants will have to continue to contend with over the balance of 2025-Q2 and Q3. However, even with the uncertainty of current US Trade Policy, the current Bull Market remains supported by solid Fundamentals. The Atlanta Fed's GDP model points to 3.8% growth in the second quarter as the import surge reversed, labor market conditions are healthy, and the Fed's preferred measure of inflation hit a four-year low. One would be correct to point out that this is old news, but the starting point is a healthy one as some of that strength likely fades in the second half.

Easier fiscal policy and Fed rate cuts may help reaccelerate growth in 2026, while political and economic realities may help prevent the U.S. administration from following a very aggressive stance on trade.

Stock Price Analytics 2025-H2 Forecast for US Equity Markets and the US Economy is as follows:

• The US Trade Deficit for Goods & Services narrowed by 55% to 61.6 Billion, (versus 66.3B estimated), in April, the lowest level since September 2023. The US Trade Deficit has narrowed due to reduced import levels for Goods.

• More stable US Trade Policy as the Trump Administration should be able to negotiate the Framework for Trade Agreements with international Trading Partners over 2025-H2; although finalized Trade Agreements will take longer to negotiate; which should result in less negative USD performance over the duration of 2025-H2.

• Existing unresolved deep-rooted disagreements between the US and China on supply chain disruptions will remain unresolved due to differences in ideology and Economic Policy between the two sovereign nation states.

• The Core Inflation rate will increase above its current 2.7% toward its long-term average of 3.67% due to higher costs for Consumer Goods resulting from the increased Tariff Costs being passed on to Consumers. Higher costs for imported Steel, Aluminum, and Softwood Lumber will result in higher costs for Goods made or using Aluminum, Steel and Softwood Lumber, on items such as canned consumable goods; vehicles; and new home construction.

• Higher Long Term Bond Yields on 20 Year and 10 Year Treasuries due Debt and Fiscal Policy Concerns.

• US Job Growth to continue to Moderate to less than the current three-month average of 135,000k.

• Initial Jobless Claims to increase and exceed 250,000k due to lower Corporate Profits and Margins resulting from Tariff’s, and less consumer confidence and spending on a going-forward basis.

• US GDP to decline to 1.8% in 2025 as forecast by the International Monetary Fund (IMF) from its 2.8% GDP 2024 Rate.

• ICE USD Index to trade below 100.

• Continued increasing USD De-dollarization by BRICS Nations.

• Traditional US Trading Partners, (for example: Canada; Mexico), will further diversify their Trade with other foreign nations due to the breech of existing Trade Agreements by the Trump Administration and the consequent break-down in trust over the stability of any Trade Agreements with the US on a going-forward basis. For example: Trade Exports from Canada to the US decreased by more than 15% in April. The result will be a higher cost for Commodities such as Oil, Rare Earths, Steel, Aluminum, etcetera to the Federal Government; State Governments; and Corporate Commodity Buyers.

• Lower GDP Growth for the balance of 2025, lower Corporate Profit and margins for Public Companies in 2025-H2 due to Tarriff and Trade Policy; in conjunction with slightly higher Core Inflation; a slightly higher Unemployment Rate; and slightly reduced job growth will likely result in two Policy Interest Rate cuts by the US Federal Reserve Central Bank at its FOMC Meetings ending September 17th, and October 29th, 2025.

In this Volatile Stock Market, it is even more important to keep your RISK in Check and STAY Disciplined.