Market Overview : June 2025
Illusion of relief: equities climb while bonds keep their guard · 6 June 2025
In May, fears of a full-blown trade war continued to ease. But the new US tax bill reignited jitters, particularly in the bond market.
The reduction in tariff tensions with China and Europe, combined with positive corporate results, gave equity markets a boost. In the United States, some equity indices recorded their best May since 1990, with gains exceeding 6%. This rebound was driven by the technology and communications sectors, supported by solid corporate results and a still very positive outlook for artificial intelligence. Nvidia, in particular, continued to shine with impressive growth figures. In contrast, the Swiss market suffered, hampered by its heavy exposure to the healthcare sector in its benchmark index. Indeed, the healthcare sector ended in sharply negative territory following the US administration’s numerous pressures on drug manufacturers.
On the bond side, rising interest rates across most regions weighed on the asset class’s performance, particularly on long-duration securities. In the United States, the poor reception of a 20-year Treasury bond issue combined with the likely debt explosion pushed 30-year yields above 5%. Conversely, convertible bonds performed well thanks to their low interest rate sensitivity and the good performance of their equity premium exposure, which benefited from the strength of their underlying assets.