Quarterly Market Insights | July 2025
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U.S. Markets |
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Markets rose in the second quarter as investors witnessed the new U.S. trade policy's impacts unfold, while tensions continued in the Middle East. The Standard & Poor’s 500 Index rose 10.57 percent, while the Nasdaq Composite climbed 17.75 percent. The Dow Jones Industrial Average gained 4.98 percent.1
April ShowersSoon after the closing bell rang on April 2, investors were caught off guard by a tariff update from the White House. Global markets reacted to the news overnight. Stocks declined over several sessions.2 After the White House announced on April 9 a 90-day pause on specific tariffs, markets pushed higher. The S&P 500 gained 9.5 percent—its largest one-day increase in 17 years. Stocks rallied late in the month on news that the administration intended to de-escalate tariff tensions with China.3,4 May FlowersStocks rebounded strongly in May as certainty around trade increased and investor anxiety lessened. Soft inflation data also helped push stock prices higher. By the end of May’s second full week, the S&P 500 had erased its year-to-date losses.5 After a well-received quarterly corporate report from a mega-cap AI chipmaker, a trade update unsettled investors. The S&P 500 finished the strongest May in 30 years.6,7 June ShootsFor June, international matters took the spotlight, with continued tariff talk between the U.S. and China, and conflict in the Middle East resulting in a ceasefire. Solid corporate earnings, a still-strong labor market, and a recovery in artificial intelligence-related stocks provided some underlying strength to the rally, with the S&P 500 and Nasdaq hitting all-time highs.8,9,10,11,12 Sector ScorecardSeven of the eleven S&P 500 Index sectors finished the quarter in the green. Gains were led by Technology (+22.64 percent), but advances in the second quarter were distributed more widely across S&P 500 sectors outside of technology-related sectors. Industrials (+12.55 percent) and Communication Services (+12.52 percent) beat the overall Index return, while Consumer Discretionary (+10.06 percent) posted a robust gain just shy of the Index. Utilities (+3.56 percent), Financials (+5.14 percent), and Materials (+2.13 percent) also advanced but underperformed the Index.13 Four sectors lost ground. Energy (-9.25 percent) and Healthcare (-7.68 percent) were the biggest laggards, while Consumer Staples (-0.86 percent) and Real Estate (-1.03 percent) finished close to flat.13
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What Investors May Be Talking About in July |
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The White House's trade policy began in earnest on April 2, right at the start of the second quarter. It’s unclear how upcoming reports might reflect trade policy. The Bureau of Labor Statistics scheduled its import and export report mid-month, expecting to provide some early insights into trade policy. The Bureau of Economic Analysis will give investors its first glimpse at second-quarter economic activity at the end of the month. The Atlanta Fed's GDP Now model, which provides a running estimate based on available economic data, has been trending higher since April.14 |
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World Markets |
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The MSCI EAFE Index rose 10.58 percent over the quarter, its second consecutive winning quarter.15 Almost every European market advanced over the quarter, with Spain (+6.52 percent) and Germany (+7.88 percent) leading the major developed European economies. Italy (+2.54 percent), the United Kingdom (+1.50 percent), and France (-1.60 percent) trailed the Index.16 Pacific Rim markets also did quite well. Korea (+23.80 percent) stood out clearly, and Japan (+13.67 percent) also beat the overall Index. Australia (+8.91 percent) also performed well, while Hong Kong (+4.12 percent) delivered more modest returns.16
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Indicators |
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Gross Domestic Product (GDP)The economy contracted at an annualized 0.5 percent rate in the first quarter of 2025. The economy grew by 2.4 percent in the fourth quarter of 2024. The first decline in GDP since 2022 was caused mainly by a surge of imports ahead of tariffs taking effect, which drove up the trade deficit.17 EmploymentEmployers added 139,000 jobs in May, more than the 125,000 jobs economists expected, fewer than the 147,000 new jobs in April and the 185,000 added in March, revised downward by a combined 95,000 jobs.18 Retail SalesConsumer spending fell 0.9 percent in May over the prior month, missing expectations of a 0.6 percent decline.19 Industrial ProductionIndustrial output fell by 0.2 percent in May, missing market expectations of a 0.1 percent increase and following April’s 0.1 percent rise.20 HousingHousing starts dropped 9.8 percent in May over the prior month to a five-year low, as homebuilders anticipated weaker sales. Year over year, new home construction fell 4.6 percent.21 Sales of existing homes rose 0.8 percent in May over the prior month, compared with April’s 0.5 percent month-over-month decline. The median existing home sales price was $422,800, a 1.3 percent increase year over year.22 New home sales fell 13.7 percent in May. Year over year, new home sales fell by 6.3 percent. The market had 507,000 unsold new homes in May, equal to 9.8 months of supply at the latest sales pace.23 Consumer Price Index (CPI)Consumer prices rose 0.1 percent in May over the prior month, less than expected and slightly lower than April’s 0.2 percent rise. Year over year, prices rose 2.4 percent, aligning with expectations. Core inflation, which excludes volatile food and energy prices, rose 0.1 percent month over month and 2.8 percent year over year, less than expected in both cases.24 Durable Goods OrdersOrders of manufactured goods designed to last three years or longer surged 16.4 percent in May, far exceeding expectations for an 8.5 percent rise.25 |
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The Fed |
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The Federal Open Market Committee (FOMC) held rates steady at its June meeting. Fed Chair Powell said policymakers are “well positioned to wait” before moving on short-term rates. He added that while the labor market is in balance, the Committee expects “a meaningful amount of inflation in the coming months…. We have to take that into account.” When testifying before Congress on June 24, Powell stayed on point with essentially the same message despite pressure from the White House to cut rates. Policymakers still have penciled in two rate cuts between now and year-end.26,27 The FOMC scheduled the next meeting for July 29-30. By the Numbers: Ice Cream |
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite, LLC, is not affiliated with the named representative, broker-dealer, or state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security. Investing involves risks, and decisions should be based on your goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Any companies mentioned are for illustrative purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Any investment should be consistent with your objectives, timeframe, and risk tolerance. The forecasts or forward-looking statements are based on assumptions, subject to revision without notice, and may not materialize. The market indexes discussed are unmanaged and generally considered representative of their respective markets. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results. The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. The S&P 500 Composite Index is an unmanaged group of securities considered to be representative of the stock market in general. The Nasdaq Composite is an index of the common stocks and similar securities listed on the Nasdaq stock market and considered a broad indicator of the performance of stocks of technology and growth companies. The Russell 1000 Index is an index that measures the performance of the highest-ranking 1,000 stocks in the Russell 3000 Index, which is comprised of 3,000 of the largest U.S. stocks. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark for the performance in major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. Index performance is not indicative of the past performance of a particular investment. Past performance does not guarantee future results. Individuals cannot invest directly in an index. The return and principal value of stock prices will fluctuate as market conditions change. And shares, when sold, may be worth more or less than their original cost. International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility. The Hang Seng Index is a benchmark index for the blue-chip stocks traded on the Hong Kong Stock Exchange. The KOSPI is an index of all stocks traded on the Korean Stock Exchange. The Nikkei 225 is a stock market index for the Tokyo Stock Exchange. The SENSEX is a stock market index of 30 companies listed on the Bombay Stock Exchange. The Jakarta Composite Index is an index of all stocks that are traded on the Indonesia Stock Exchange. The Bovespa Index tracks 50 stocks traded on the Sao Paulo Stock, Mercantile, & Futures Exchange. The IPC Index measures the companies listed on the Mexican Stock Exchange. The MERVAL tracks the performance of large companies based in Argentina. The ASX 200 Index is an index of stocks listed on the Australian Securities Exchange. The DAX is a market index consisting of the 30 German companies trading on the Frankfurt Stock Exchange. The CAC 40 is a benchmark for the 40 most significant companies on the French Stock Market Exchange. The Dow Jones Russia Index measures the performance of leading Russian Global Depositary Receipts (GDRs) that trade on the London Stock Exchange. The FTSE 100 Index is an index of the 100 companies with the highest market capitalization listed on the London Stock Exchange. Please consult your financial professional for additional information. Copyright 2025 FMG Suite. |
1. WSJ.com, June 30, 2025
2. WSJ.com, April 4, 2025
3. WSJ.com, April 9, 2025
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13. Sectorspdrs.com, June 30, 2025
14. GDPNow.com, June 17, 2025
15. MSCI, June 30, 2025
16. WSJ.com, June 30, 2025
17. BEA.gov, June 26, 2025
18. WSJ.com, June 6, 2025
19. CNBC.com, June 17, 2025
20. FederalReserve.gov, June 17, 2025
21. MarketWatch.com, June 18, 2025
22. National Association of Realtors (nar.realtor), June 23, 2025
23. Realtor.com, June 25, 2025
24. CNBC.com, June 11, 2025
25. KPMG.com, June 26, 2025
26. WSJ.com, June 18, 2025
27. WSJ.com, June 24, 2025
28. IDFA.org, June 2025