AimStarInsights | June Strategy Brief: Volatility, Rebound, and What Comes Next
May delivered one of the strongest monthly performances since late 2023, as markets rebounded sharply from early tariff-driven turbulence. But with inflation risks, valuation pressures, and geopolitical uncertainties still looming, is the recovery sustainable—or just temporary relief?
In this latest Monthly Market Update, Scott Cheng, MBA, CFA, Portfolio Manager at AimStar Capital Group Inc., offers a timely and in-depth breakdown of recent market dynamics and what to watch in the second half of 2025:
🔹 What drove the market’s powerful rebound in May?
🔹 How are inflation, Fed policy, and earnings expectations evolving?
🔹 What short- and medium-term strategies can investors consider amid elevated uncertainty?
Click to read the full report and gain insight from a portfolio manager’s perspective.
Canadian Dollar Rises Despite Weak Economy
Despite Canada’s slowing economy, the loonie has strengthened, rising 3% against the U.S. dollar since Trump’s “Liberation Day.” Desjardins forecasts it will reach 74 cents USD by year-end and 77 cents by late 2026—not due to loonie strength, but a weakening greenback.
Desjardins strategist Mirza Shaheryar Baig attributes this to global capital shifts and declining confidence in the U.S. dollar, which has lost its safe-haven appeal. Canadian institutional investors are also boosting currency hedging amid U.S. market volatility.
Meanwhile, the OECD projects sharp U.S. growth slowdowns in 2025, with Trump’s protectionist policies and anti-corporate rhetoric rattling investors. Still, risks remain: strong U.S. yields could revive dollar carry trades.
For Canada, a stronger loonie could hurt exports and economic momentum. Desjardins expects the Bank of Canada to cut rates by 75 bps to 2% this year to cushion the impact.
Canada Ranks Last in Global Services and Manufacturing PMIs
Canada’s economy is showing broad-based weakness, with S&P Global’s May Services PMI revealing that the sector is contracting and ranks last among 14 countries surveyed.
This follows Canada’s manufacturing PMI, which was also the lowest among 30 countries earlier in the week.
According to National Bank economists, Canada is now “dead last in both manufacturing and services”, highlighting its outlier status among global peers amid growing tariff-related strain.
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Key Economic and Geopolitical Highlights
Canada Unemployment Rises to 7% in May
Canada’s unemployment rate rose to 7%, with job losses concentrated in manufacturing, transport, and warehousing, especially in trade-sensitive regions. Youth unemployment also worsened as summer begins.
U.S. Rate Cut Odds Recede After Jobs Report
Fed rate cut expectations declined. CME FedWatch shows only a 59.8% chance of a rate cut in September, down from 88% last week, as May jobs data beat forecasts.
Tactical Alert in Los Angeles
LAPD declared a citywide tactical alert on June 8 following protests, enabling extended police deployments. No major escalation reported yet.
Iran-Israel Intelligence Tensions Rise
Iran claims to possess thousands of Israeli nuclear secrets, raising fears of conflict escalation. Analysts suggest Netanyahu may use this to divert domestic attention.
ECB May Adjust Rate Path
ECB Governing Council member Escrivá said policy assumptions may need fine-tuning, citing uncertainty from Trump’s inflationary trade policies. He supports a data-dependent gradual approach.
UK Labour Faces £2 Trillion Budget Allocation Task
UK Chancellor Rachel Reeves will allocate £2 trillion in public spending this week, shaping the Labour government’s four-year agenda.
Port of LA Sees Job Losses Amid Trade Slowdown
Port of Los Angeles reported a 25% drop in May cargo volume. About half of dockworkers are currently without work, as U.S. tariffs continue to dampen trade flows.
TRENDS IN INDICES
Canadian Stock Market: TSX Hits Record High Amid Strong Jobs Data; Eyes on U.S. Inflation
The S&P/TSX Composite Index closed at a record high of 26,429 on Friday, marking eight winning weeks out of the last nine. Markets gained momentum from better-than-expected May jobs data in both the U.S. and Canada, reinforcing confidence in labour market resilience.
Despite falling gold and copper prices dragging down mining stocks, gains in technology, financials, and healthcare supported the index.
Enghouse Systems (ENGH) plunged over 9% after missing earnings expectations, with Q2 revenue and profit dropping sharply. The stock is now down 12% year-to-date.
Top gainers included Algoma Steel, Shopify, Seabridge Gold, and Baytex Energy, all up over 4%. Most active stocks were CNRL, Suncor, Cenovus, Manulife, and TC Energy.
U.S. Stock Market: U.S. Stocks Climb on Strong Jobs Report, Tech Leads Gains
U.S. markets closed higher Friday as a better-than-expected May jobs report eased economic concerns. The S&P 500 rose 1.03% to 6000.32, closing above the 6000 mark for the first time since February. The Dow gained 1.05%, and the Nasdaq advanced 1.20%.
Nonfarm payrolls rose by 139,000, beating expectations of 130,000, while the unemployment rate held at 4.2%. The data lowered expectations of imminent Fed rate cuts, with markets now pricing in the first rate cut in September, and possibly only one more in December.
Tech stocks led gains, with Tesla rebounding 3.8% after Thursday’s sharp drop. Amazon rose 2.7%, Alphabet climbed 3.25%, while Broadcom fell 5% on weak revenue guidance.
President Trump said trade talks will resume on June 9, prompting market optimism, though analysts remain cautious on whether a meaningful deal will emerge.
For the week, the S&P 500 rose 1.5%, the Dow added 1.17%, and the Nasdaq gained 2.18%.
Currency Markets: U.S. Dollar Rises on Strong Jobs Data, Rate Cut Bets Pushed Back
The U.S. dollar strengthened against major currencies on Friday after May nonfarm payrolls beat expectations, despite slowing from April. Employers added 139,000 jobs, surpassing the 130,000 forecast, while the unemployment rate remained at 4.2%.
USD/JPY rose 0.95% to 144.87
USD/CHF gained 0.26% to 0.822
EUR/USD fell 0.43% to 1.1395
The U.S. Dollar Index climbed 0.53% to 99.20, though it ended the week lower overall.
Analysts say resilient labor data pushed back expectations for Fed rate cuts, leading to short-covering in the dollar. Strong wage and employment figures also drove up U.S. 10-year Treasury yields, reinforcing the view that monetary easing may be delayed.
Despite recent gains, the dollar remains down roughly 8–9% YTD against safe-haven currencies like the yen and Swiss franc. The euro, although retreating Friday, is still up ~10% YTD, supported by ECB signals that policy tightening may soon end.
Gold Market: Gold Falls as Strong U.S. Jobs Data Delays Rate Cut Hopes
Gold prices fell over 1% on Friday after stronger-than-expected U.S. job data reduced market expectations for imminent Fed rate cuts. Spot gold dropped 1.1% to $3316.13/oz, while U.S. gold futures settled 0.8% lower at $3346.60/oz.
May U.S. nonfarm payrolls rose 139,000, beating forecasts. The unemployment rate held at 4.2%, reinforcing the view that the Fed may wait until September to cut rates, with only two cuts projected in 2025.
Silver briefly surged to a 13-year high before closing 0.5% lower at $35.96/oz. UBS analysts noted speculative flows drove the rally as silver remains undervalued relative to gold.
Platinum rose 2.5% to $1158.20/oz, the highest since March 2022, and palladium gained 3.9% to $1045.45/oz, both posting weekly gains.
Oil Market: Oil Prices Post Weekly Gain on Jobs Data, Trade Hopes
Crude oil prices rose over $1 on Friday, marking their first weekly gain in three weeks. Optimism over U.S. job growth and renewed trade talks supported sentiment.
Brent crude settled at $66.47, up 1.73%
WTI crude closed at $64.58, up 1.91%
For the week, Brent rose 2.75% and WTI jumped 4.9%, snapping a two-week losing streak.
Analysts say the May U.S. jobs report showed moderate labour cooling, reinforcing expectations for a potential Fed rate cut, which could support economic activity and oil demand.
Meanwhile, OPEC+ agreed to increase output by 411,000 bpd in July, part of a broader strategy to regain market share. Saudi Arabia’s push for larger increases was declined. HSBC expects supply-demand balance to remain stable this summer as oil demand peaks.
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Financial Market Data Copyright © 2025 AimStar myportfolio. Data as of June 09, 2025, 12:30 PM EST
WHAT'S HAPPENING THIS WEEK
Monday, June 9
U.S. wholesale inventories (April)
Apple WWDC 2024 kicks off with CEO Tim Cook’s keynote
Earnings: Casey’s General Stores
Tuesday, June 10
NFIB Small Business Optimism Index (May)
Earnings: GameStop, J.M. Smucker, Core & Main, GitLab, Academy Sports
Wednesday, June 11
Key data: U.S. CPI (May)
Earnings: Oracle, Chewy, SailPoint, Cognyte
U.S. federal budget (May)
Thursday, June 12
Initial jobless claims (weekly)
Tesla robotaxi launch expected
Earnings: Adobe
Key data: PPI (May)
Friday, June 13
University of Michigan Consumer Sentiment (preliminary, June)
Published by Vikki Zhao
June 9 , 2025 11:00 AM EST. 10 min read
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