U.S. equity markets have shown robust performance heading into the second half of 2025, with the S&P 500 up 6.76% year-to-date and experiencing a swift rally since June 20th. However, market sentiment is growing cautious as valuations are stretched, and much of the optimism has already been priced in. The S&P 500’s price-to-earnings ratio has risen from a low of 18x to 22x, suggesting limited upside without new catalysts. With second-quarter earnings expected to beat expectations but already reflected in prices, attention is shifting toward 2026 projections. PVG Asset Management notes the return of tariff concerns in the headlines—particularly with Trump’s trade tactics resurfacing—and advises trimming positions ahead of seasonally challenging months.

Despite economic concerns like a recent ADP report showing job losses, June’s employment data surprised to the upside, which delayed potential Fed rate cuts. Bond yields remain relatively elevated, and the market is anticipating only modest economic growth with potential for lower interest rates. Sector-wise, Industrials, Semiconductors, and Financials have been standouts, while Biotech, Healthcare, and Consumer Discretionary lag behind. Notably, international equities, especially the EAFE Index, have outperformed U.S. markets, supported by European Central Bank rate cuts. PVG strategies such as Tactical Growth and Emerging Healthcare have posted strong year-to-date returns, and the firm remains focused on tactical adjustments amid rapid market movements and evolving macroeconomic signals.

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