In Pixar’s 2003 classic Finding Nemo, Ellen DeGeneres plays a forgetful blue fish, Dory, who helps Nemo’s dad find the persistence he needs to find his son. During the film, Dory uses the mantra “just keep swimming” to power through moments of confusion and anxiety. Lately, the stock market seems to be channeling that same spirit.
Despite headlines warning of slowdowns, inflation, geopolitical tension, and overvaluation, markets keep pressing forward. As of June 30th, we’re sitting at new highs for the S&P 500, Nasdaq Composite, and international benchmarks like the MSCI All Country World ex-US (Source: YCharts). It’s as if the market, like Dory, has a short memory for fear and just keeps swimming.
Is the market suffering from memory loss? Has it become so bogged down with confusion and anxiety that it just constantly marches higher. Or is it simply swimming with purpose toward a future driven by innovation and growth?
We don’t claim to have all the answers—but we’re not afraid to dive in. Let’s check in on the numbers and themes shaping the first half of 2025.
Market Highlights
- New Highs: The S&P 500 and Nasdaq Composite both hit new highs in June! This is in the face of continued uncertainty about trade negotiations, conflict with Iran, and controversy over the budget bill passed by Congress. To say the least, the market is looking right past the risk and straight to the future (which is basically Artificial Intelligence these days).
Economic Scorecard
- Inflation: Steady at 2.35% in May. This is hovering just above the Federal Reserve’s 2% target rate.
- Employment: Unemployment remains at 4.2%. While the headline number in June was strong, it masked some spots of weakness in the private sector data. In particular, small businesses shed jobs for the month.
- Federal Reserve: No rate cuts so far in 2025. The Fed is juggling inflation concerns with slowing growth. The next decision is at the end of July, with markets expecting rates to stay at 4.25%–4.50%.
- Oil: Spiked 25% in June amid Middle East tensions but has since cooled to the mid-$60s (Source: YCharts).
- The Dollar: Weakness here is the one red flag. A long run of dollar strength may be giving way, and gold has rallied in response. The “America First” rhetoric feels a bit like “Dollar Last” to global investors.
What’s Driving This Rally?
The short answer: Artificial Intelligence (A.I.). Investors are leaning into the A.I. narrative in a big way. Amid all the noise, this is the one story with real legs. Because of the FOMO (fear of missing out), it’s pushing risk assets higher. When in doubt, investors are keeping it simple and betting on innovation.
The Biggest Takeaway
This market has momentum. It’s strong, it’s selective, and it’s favoring certain areas in a big way. This isn’t a “buy everything” market—it’s a “lean into leadership” environment. We’ve remained focused on high-performing sectors like tech, communication services, industrials, and financials—and it’s paid off. We’ve also leaned into themes like aerospace, defense, and cybersecurity, all of which are delivering.
The Numbers
- YTD Returns (as of June 30; source YCharts):
- Dow: +4.5%
- S&P 500: +5.1%
- Nasdaq: +6.6%
Stocks stumbled in April during the “Liberation Day” tariff scare. But soon after, all the trading desks were talking about the TACO trade, an acronym for “Trump Always Chickens Out”, and with that the market staged a sharp V-shaped recovery as tariff fears eased and strong earnings and A.I. excitement took over. Stocks closed the first half with gains across the board. The Dow rose 4.5%, the S&P 500 is up 5.1%, and the Nasdaq is up 6.6% for 2025. Below is a table with trailing returns of the major equity indexes at the end of the first half (source: YCharts):
International stocks (represented by the MSCI EAFE index and MSCI Emerging Markets index) have outperformed their US counterparts so far this year. Part of the reason for this outperformance has been the decline in the Dollar for US investors.
Sector-wise, communication services, industrials, tech, and financials are leading. Our portfolios have been overweight with most of these, with strong results, especially in aerospace and cybersecurity. Utilities have also caught a bid—driven in part by expected demand from A.I.-driven data center energy use.
Policy & Politics
The very public battle between President Trump and Fed Chair Jerome Powell has been something to watch. It hasn’t been as exciting as Trump and Musk fighting on social media, but Trump has been applying significant outward pressure on Powell to cut interest rates. This is likely to heat up as Trump has threatened to replace Powell. With Fed Governor Adriana Kugler’s term expiring in January of 2026, Trump could replace her with a loyalist and then nominate that person for the role of Chair sometime next year. If this were to happen, the expectation is that interest rates would then come down sharply. There is plenty in that whole theory to unpack, but the market sees the prospect for lower rates and just keeps swimming higher.
Final Thought
Markets may not be ignoring risk….they may be prioritizing opportunity! Like Dory the market is choosing to just keep swimming, driven by faith in innovation and momentum. We’ll continue to navigate with both optimism and caution, staying focused on the strongest trends and clearest signals.
Jordan Kaufman
Chief Investment Officer
Green Ridge Wealth Planning
Disclosure:
Green Ridge Wealth Planning, LLC is a registered investment adviser. The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment/tax advice. The investment/tax strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment/tax strategy for his or her own particular situation before making any investment decision(s). You are responsible for consulting your own investment and/or tax advisor as to the consequences associated with any investment.
The opinions referenced are as of the date of publication and are subject to change due to changes in the market or economic conditions and may not necessarily come to pass. Any opinions, projections, or forward-looking statements expressed herein are solely those of the AUTHOR, may differ from the views or opinions expressed by other areas of Green Ridge Wealth Planning, LLC, and are only for general informational purposes as of the date indicated.