Breakfast News: June Rally Defies Fears

Breakfast News: June Rally Defies Fears

July 1, 2025

1. Nasdaq Now Positive YTD, European Stocks Excel

The S&P 500 notched a 4.53% gain for June, with the Nasdaq up 5.86%, as investor risk sentiment improved with easing geopolitical tensions. The tech sector led the way, with June's 8.2% return matching the performance for the first half of the year, meaning all of the gains came during the last month.

• "We think this is going to be a broader recovery": Mike Wilson, chief investment officer at Morgan Stanley (MS 0.12%), believes the market could head even higher in coming months, driven by more interest rate cuts from the U.S. Federal Reserve.
• Steep U.S. dollar fall helps international stocks surge: In part thanks to the sharpest first half-year decline in the dollar since 1973, non-U.S. stocks have been outperforming. This includes Spain (+42.8%), Italy (+35.7%), and Germany (+35.2%).

2. Amazon Reaches Robot Milestone

Amazon (AMZN -1.59%) has deployed its one millionth robot in operations, as it launches a new generative AI foundation model to improve robot fleet travel in a bid to further boost efficiency and profitability.

• "They're one step closer to that realization of the full integration of robotics": Reuben Scriven, a research manager at Interact Analysis, outlined the advancement of tech in recent years, with the business now on the cusp of using more robots than humans in its warehouses.
• 75% of Amazon's global deliveries are robot assisted in some way: Automation helps to improve productivity but does come with a concern of a shrinking workforce, with the number of employees per facility having fallen for the past five years.

3. EU Close to Agreeing Trade Deal

The European Union is becoming increasingly confident of striking a trade deal with the U.S. before the deadline next week, with reports the commission is happy to accept a universal 10% tariff rate if the U.S. lowers rates on key sectors.

• Autos and steel in the spotlight: Autos and related parts currently have a 25% import levy, with steel and aluminum at 50%. Last year, the bloc exported $62.2 billion worth of cars and parts to the U.S., its largest destination, highlighting the key impact of any tariff on the sector.
• Scenario planning ahead of trade deadline: Officials set out four potential scenarios ahead of July 9, including a potential timing extension, an unbalanced U.S. offer, and even the case of President Trump walking away from the talks completely.

4. Apple Considers External AI Help

Bloomberg reports Apple (AAPL 2.22%) is mulling using third-party AI technology to power a new version of Siri, with both Anthropic and OpenAI in the running as part of confidential discussions.

• Major reversal could help to kick-start flailing AI effort: Apple has been behind the curve on AI, but tapping into third- party models could be a fast way to catch up with competitors. Fool analyst Jason Moser yesterday mentioned "whatever leadership decides to do, time isn't their buddy; my suspicion is we'll see a partnership soon."
• Apple denied motion to dismiss smartphone antitrust case: A U.S. federal judge rejected an appeal on a lawsuit raised last year alleging Apple makes it difficult for third-party devices to compete with its own, meaning it will now have to face the case.

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