On the bright morning of Friday, 6th June 2025, the financial markets drew to a close, marking a significant milestone. At this juncture, the indicator settled at 6,000.36, a remarkable rise when juxtaposed against its earlier position on the 7th of April, 2025, where it languorously lay at 4,835.04. This journey from April to June, albeit marked by its peaks and troughs, underscores the inherent volatility within both the stock and bond markets that investors have navigated over the preceding 12 to 13 weeks.
In the arena of year-to-date (YTD) returns for the standard benchmarks, the landscape has been variegated. The S&P 500, a beacon for global equity markets, logged a modest gain of +1.25%. The Barclay’s Aggregate, representative of the broad bond market, edged higher with a return of +2.03%. Furthermore, a Balanced 60% stocks and 40% bonds portfolio, which offers a window into mixed-asset performance, stood at +1.56% YTD. Despite the whirlwind of media coverage, especially the fervid discussions on tariffs, the YTD returns, at a glance, may seem unremarkable.
Diving deeper, the financial community keenly awaits the S&P 500 earnings update, a quarterly spectacle that unravels the fiscal health and prospective growth of its constituents. Drawing from the latest data provided by LSEG (London Stock Exchange Group), there’s a slight uptick observed in the growth rates anticipated for the Q2 and Q3 ’25 S&P 500 Earnings Per Share (EPS) and revenue. While this increment is marginal, it injects a cautious optimism into the market air, especially with the Q2 ’25 earnings announcement season looming four weeks ahead.
A detailed scrutiny of the S&P 500 data reveals an intriguing fabric of financial metrics. The forward 4-quarter estimate (FFQE) for EPS witnessed a minor escalation to $269.65, up from the prior week’s $269.36, yet trails behind the $272 high marked early January. The forward Price-to-Earnings (P/E) ratio, a gauge of market valuation, now reads at 22.25x, a leap from the 20.8x recorded on 28th March. Correspondingly, the forward earnings yield has contracted to 4.49%, a sharp descent from the surge to 5.50% in early April 2025. High yield spreads, an indicator of the risk premium required by investors for taking on riskier debt, have remained stagnant over the past month, hovering around +323 according to Bespoke data.
The intrigue deepens as we explore the S&P 500 EPS trends across various sectors for the year 2025. An examination of annual expected growth sheds light on a deceleration in the technology sector’s EPS growth rate, from an ambitious 20% in early January ’25 to a moderated 16.4% as of June 6th, 2025. Despite this slowdown, the tech sector is poised to deliver a robust year of earnings growth, albeit at a moderated pace compared to the initial projections.
As the financial narrative unfolds, a bevy of factors command attention. Foremost is the proactive stance by 75% of US companies in anticipation of forthcoming tariffs, as reported by Barron’s, which has surprisingly not translated into rampant inflation. This poses intriguing questions about the resilience of the inflation data amidst these macroeconomic adjustments. The forthcoming May CPI and Core CPI data, anticipated to unveil a +0.3% and +0.2% change respectively, will further illuminate the inflation landscape and its implications for Treasury market friendliness.
Amidst these economic deliberations, the ‘soft’ data, notably the fracturing between Treasury market trends and inflation expectation data, beckons a closer inspection. The imminent release of the University of Michigan Consumer Sentiment data, particularly its inflation expectations component, promises to further demystify the ongoing dichotomy in market sentiment and inflation outlook.
In conclusion, the labyrinth of financial markets continues to evolve, marked by subtle shifts in earnings estimates, investor sentiments, and macroeconomic indicators. As we navigate through these turbulent times, the forthcoming earnings season, coupled with pivotal inflation data, will undoubtedly cast new hues on the investment landscape. In this complex mosaic, the cardinal piece of wisdom for market participants remains a nuanced understanding of these dynamics, underpinned by a caveat: past performance is not necessarily indicative of future results, and market volatility requires a tailored investment approach.
The discourse encapsulated herein reflects an analytical overview interspersed with data insights from June 6th, 2025, providing a panoramic view of the financial markets’ unfolding narrative. It captures the pulse of an evolving economic environment, tinged with the cautious optimism and analytical rigor that characterize the pursuit of financial wisdom.
The closed at 6,000.36 on Friday, June 6th, 2025. It was low on April 7th, 2025, was 4,835.04.
Despite the volatility in both stocks and bonds over the last 12 – 13 weeks, here are the YTD returns for the benchmarks:
- S&P 500 (): +1.25%
- Barclay’s Aggregate (): +2.03%
- Balanced 60% / 40% portfolio: +1.56%
Despite the mainstream financial and regular media frenzy around tariffs, returns YTD have been a nothing-burger.
S&P 500 Earnings Update
Here’s a table updated weekly from LSEG data that shows the trend in expected growth rates for Q2 and Q3 ’25 S&P 500 EPS and revenue growth rates.
The growth rates actually ticked higher this week (barely).
It’s another 4 weeks until we start seeing the actual Q2 ’25 earnings releases for S&P 500 components, and the financials always kick the the first two weeks of earnings.
S&P 500 data:
- The forward 4-quarter estimate (FFQE) ticked higher this week to $269.65 from last week’s $269.36, and is now $9 lower than the quarterly bump in early January of $272;
- The forward PE is 22.25x versus the PE on 3/28 of 20.8x;
- The forward earnings yield is 4.49%, down sharply from the early April ’25 spike to 5.50%;
- High yield spreads are unchanged the last 4 weeks, hovering around +323 the last two weeks (per the Bespoke data).
Another Look at S&P 500 EPS Trends:
There are several time frames to look at S&P 500 EPS and revenue trends, and one is checking the annual full-year expected growth every few weeks.
The expected S&P 500 EPS growth rate is down from an expected 14% in early January ’25, to this week’s expected +8.3% this week.
Probably not a surprise to too many readers.
The ’s interesting: check the steady decline in the expected 2025 tech sector EPS growth rate from 20% in early January ’25 to the 16.4% as of Friday, June 6th, 2025 (remember this is the full-year expected growth rate), while 2026 remains fairly steady.
Technology is still on track to have a solid year of sector earnings growth, just at a slower rate of growth than what was expected 5 months ago.
Conclusion
Readers haven’t seen an earnings update in a couple of weeks, so the above tables reflect data as of June 6, 2025.
Barron’s ran a headline in the last few days saying that 75% of US companies have already raised prices to anticipate coming tariffs, and yet the inflation data remains tame. That’s a valid point to make, but as the calendar rolls through the summer, we will start to see whether, in fact, the very good inflation data can remain “friendly” to the Treasury market.
The May and are due out Wednesday morning at 7:30 am, and expectations per the consensus (briefing.com) are for +0.3% and +0.2% respectively. With the rise in , I would have expected those numbers to be reversed and Core CPI closer to +0.2%, but let’s see what the data shows.
As long as the remains below 4.809% or the January 14th high tick, there is little reason to panic.
Finally, the “” data began to crack recently, after the disconnect between the Treasury market and the inflation expectations data. The University of Michigan Consumer Sentiment data is due out Friday morning, June 13th, and within the sentiment are “inflation expectations” components.
We’ll see how this dichotomy ends.
Disclaimer: None of this is advice or a recommendation, but only an opinion. Past performance is no guarantee of future results. None of the information above may be updated, and if updated may not be done so in a timely fashion. Readers should gauge their own comfort with market volatility and adjust accordingly.
Thanks for reading.
